Hi guys,
As an school project, im planning on using what we´ve been learning about linear regression to “predict” movements in this pair based upon several factors. Im currently planing on using the following:
GOLD PRICE
NZDUSD
BONDSPREADS
RSI
CURRENT AUD INTEREST RATES
What do you guys think, about them and which ones, if any, would you add as good predictors?
Thank You,
2Bit
They are all pretty good. You might want to add interest rates to that list though
You would be better off running your regression using % changes rather than absolute values so the result would be a forecast change in AUD/USD, which could then be applied to create a rate forecast. Even that isn’t really going to produce a good linear relationship between the variables, but it’s likely to be closer than just working off price alone.