The Australian dollar is down against its US counterpart, back below 76 US cents even though the greenback has also fallen after a round of weaker-than-expected US employment data.
At 0635 AEST on Friday, the Australian dollar was worth 75.84 US cents, down from 76.00 US cents on Thursday.
Westpac’s Imre Speizer said comments by European Central Bank officials had little impact on market expectations of a near-term shift in the policy stance. The ECB minutes confirmed that pressure to remove the easing bias had increased with positive survey data and the broadening and strengthening of growth.
Meanwhile, in the US, private sector payrolls lifted by 150,000 in June, less than the 230,000 positions created in May and less than the expected 185,000-188,000 In a separate report, the US Labour Department said initial claims for state unemployment benefits increased 4,000 to a seasonally-adjusted 248,000 for the week ended July 1 — the third straight weekly increase in claims. Mr Speizer said the US dollar index shed 0.5 per cent on the day. AUD slipped from 0.7615 to 0.7578.
The local currency is also lower against the yen and the euro.
What does this mean for the economy?
A plummeting Australian dollar may sound like a bad thing, but it’s actually good news because although buying a television could be more expensive, at least jobs will be easier to come by. The Australian dollar has been in freefall for the past four months, plunging from US94¢ in early September to a five-and-a-half year low of US75.84¢ this week.
The AUD being high compared to the USD really weighed on the export sector, it’s really weighed on tourism as well and those businesses that have a large exposure to offshore competition.
A lower dollar makes Australia more attractive to international tourists and encourages Aussies to travel at home rather than abroad. It also gives exporters a helpful boost, giving their goods an advantage compared to economies with higher currencies.
Given the fact that you get stronger growth, tourism and better manufacturing from this fall, kind of makes up for the rise in consumer product prices. Lifting the economy is crucial to Australia “A rising tide lifts all boats” meaning that in the long run, the economy will grow and get better in every aspect.
Overall, the bias in prices is: Sideways.
Short term: Prices are stalling.
Intermediate term: Prices are ranging.
By the way, prices are vulnerable to a correction towards 0.75.
The projected upper bound is: 0.77.
The projected lower bound is: 0.75.
The projected closing price is: 0.76.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
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 18.4211. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 3 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 53.25. 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 sell 109 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 -35. This is not a topping or bottoming area. The last signal was a sell 3 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.001 at 0.759. Volume was 54% below average (consolidating) and Bollinger Bands were 24% narrower than normal.
Open High Low Close Volume
0.758 0.760 0.757 0.759 38,283
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 0.76 0.75 0.75
Volatility: 8 8 10
Volume: 78,779 79,385 98,644
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 0.9% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of AUD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AUD= and have had this outlook for the last 23 periods.
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