Australian Dollar (A$) ⇨ US Dollar ($) (AUDUSD) Not Stable

Australian Dollar (A$) ⇨ US Dollar ($) (AUDUSD) Not Stable
Australian Dollar (A$) ⇨ US Dollar ($) (AUDUSD) Not Stable
The Australian Dollar rose temporarily after strong employment data boosted the outlook for the economy on Thursday, but those gains proved ephemeral after it became clear most of the job gains had been part-time.
  • The “USD” side of AUD did a lot of the driving last week
  • Which is not to say there wasn’t some fascinating economic news out of Australia
  • But there’s very little on the sked for next week, which may leave USD in charge again

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: 0.76.

The projected lower bound is: 0.73.

The projected closing price is: 0.75.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with FOREX AUD=). It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 75.4097. 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 49.80. 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 74 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 63. This is not a topping or bottoming area. The last signal was a buy 6 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 3 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.004 at 0.746. Volume was 9% below average (neutral) and Bollinger Bands were 9% narrower than normal.

Open    High    Low     Close    Volume
0.741    0.747   0.740  0.746   85,843

Technical Outlook
Short Term:                Neutral
Intermediate Term:  Bearish
Long Term:                Bearish

Moving Averages: 10-period    50-period    200-period
Close:                       0.74             0.75              0.75
Volatility:                6                   10                 10
Volume:                  82,641          83,937        101,564

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 1.0% 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 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 40 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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