Australia: S&P/ASX 200 (.AXJO) Investors are cautiously optimistic China and the US could reach a trade truce

Australia: S&P/ASX 200 (.AXJO) Investors are cautiously optimistic China and the US could reach a trade truce

Australia: S&P/ASX 200 (.AXJO) Investors are cautiously optimistic China and the US could reach a trade truce

Australian shares opened the week’s trading higher on Monday, as the market rallied from an opening loss on a subdued day of trading ahead of a key meeting between US President Donald Trump and China’s Xi Jinping later this week.

The S&P/ASX 200 Index rose 14.6 points, or 0.2 per cent, to 6665.4 while the broader All Ordinaries advanced 11.2 points, or 0.2 per cent, to 6745.5.

Investors are cautiously optimistic China and the US could reach a trade truce when they meet at the G20 Summit on Friday. However, with a large amount of optimism priced in, any disappointment could hit local shares hard.

The Australian dollar has rebounded in the past few days and could continue to climb higher this week, supported by a sliding US dollar. The Aussie has risen 1.7 per cent against the greenback since Tuesday. “The Australian dollar will remain in a tight range as market participants weigh up expectations for July rate cuts by both the FOMC and RBA,” CBA currency strategist Kim Mundy said. “But, with little major economic data in Australia and another soft US inflation reading expected on Friday, the Aussie could drift higher by the end of the week.”

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 6,399.90.

The projected upper bound is: 6,794.29.

The projected lower bound is: 6,554.26.

The projected closing price is: 6,674.27.

Candlesticks

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 30 white candles and 20 black candles for a net of 10 white candles.

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).

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 86.2861. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 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 69.26. 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 1 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 93. This is not a topping or bottoming area. The last signal was a sell 0 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 buy 8 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 14.600 at 6,665.400. Volume was 13% below average (neutral) and Bollinger Bands were 76% wider than normal.

Open High Low Close Volume___
6,650.8006,665.4006,617.0006,665.400 558,757,952

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 6,593.90 6,397.76 6,059.42
Volatility: 12 12 14
Volume: 753,057,984 621,245,888 624,329,856

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

S&P/ASX 200 is currently 10.0% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .AXJO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 9 periods.

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