Australian Dollar: USD/AUD (AUD=X) Trying To Find Support

Australian Dollar: USD/AUD (AUD=X) Trying To Find Support

The Australian dollar has fallen rather hard during the trading session on Friday, attacking the 0.67 handle. This is an area that should be important though, because it is the top of the consolidation from the global financial crisis over a decade ago. The market also has seen a bounce from here a couple of times recently, so that is something that should be paid attention to as well. That being said, the market can turn around and go positive for the Friday session, it would be an extraordinarily bullish sign.

By doing so, it could be the beginning of the end of the downtrend. Having said that, the coronavirus is still front and center in of course has a certain amount of negativity attached to the Australian dollar due to the fact that the Australian economy is so highly levered towards China. After all, China consumes 54% of all copper, and that of course is one of the major exports coming out of Australia. Furthermore, one would have to wonder whether or not there is going to be any global growth, and it now looks as if there are a lot of concerns. That being said, we are overstretched so I would expect some type of bounce in the short term if nothing else. If we were to break down below the bottom of the range for the day, that would be an extraordinarily negative turn of events, but not something that would be easily done considering how important this region has been. All things being equal, the downside is probably somewhat limited in the short term.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 0.68.

The projected upper bound is: 0.68.

The projected lower bound is: 0.66.

The projected closing price is: 0.67.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 21 white candles and 26 black candles for a net of 5 black candles.

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.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 10.8641. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 6 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 21.04. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 22 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 -122.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 19 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed unchanged at 0.669. Volume was 97% below average (consolidating) and Bollinger Bands were 50% wider than normal.

Open     High      Low     Close     Volume___
0.669 0.670 0.668 0.669 1,620
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.68 0.69 0.69
Volatility: 6 7 7
Volume: 49,338 46,135 63,651

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.

Summary

FOREX AUD= is currently 2.6% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of AUD= (mildly bearish). Our trend forecasting oscillators are currently bearish on AUD= and have had this outlook for the last 14 periods. Our momentum oscillator is currently indicating that AUD= is currently in an oversold condition.

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