Australian Dollar: USD/AUD (AUD=X) Drifts Lower
The Australian dollar has initially tried to rally during the trading session on Tuesday, but then rolled over a bit to show signs of weakness. At this point, the Australian dollar has seen a flash crash on Monday, but now it looks as if the market is in fact going to try to reach towards the 0.65 level again. At this point, if the market does find support there then it could try to reach towards the 0.67 handle. That is a level that will attract a certain amount of attention as well, as it has been a negative spot on the chart.
To the downside, if the market does break down below the 0.65 handle, then we could go looking towards the 0.63 level again which was the bottom of the financial crisis. I think that level may have to be retested before we can turn things around, but the situation that we find ourselves in is that the news can change everything in the blink of an eye. That being said, if you get a negative headline it typically works against the value of the Aussie dollar. This will be especially true if it’s China related, or coronavirus related as a slowdown in global trade certainly has an effect on demand for Australian commodities. Pay close attention to the copper market, it generally will give you a “heads up” as to how Australia is about to perform. If we believe that the market is suddenly going to pick back up in China, then Aussie is the way to play. However, if China is still going to be very slow, then it will be reflected in this currency.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 0.67.
The projected upper bound is: 0.66.
The projected lower bound is: 0.64.
The projected closing price is: 0.65.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 18 white candles and 30 black candles for a net of 12 black candles.
A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with FOREX AUD=) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.
A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with FOREX AUD=) it is called a bullish hammer.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 57.9473. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 34.10. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 6 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -127.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.000 at 0.650. Volume was 93% below average (consolidating) and Bollinger Bands were 32% wider than normal.
Open High Low Close Volume___
0.651 0.651 0.648 0.650 3,904
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.66 0.67 0.68
Volatility: 13 9 8
Volume: 78,292 59,216 60,172
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX AUD= is currently 4.8% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of AUD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on AUD= and have had this outlook for the last 41 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.
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