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Australian Dollar: AUD/USD (AUD=X) Rallies as PM Extends Fiscal Stimulus

$AUD #AustralianDollar #FX #Currency #Trading #Markets

The AUD/USD exchange rate is extending gains for a third straight day. The pair settled on Tuesday +1.6% at US$0.7128. At 13:45 UTC, AUD/USD trades +0.4% at US$0.7155 after touching a 15-month high of US$0.7182.

The Australian dollar is roaring higher on stimulus optimism despite fears over a second wave of coronavirus in Australia.

Australian Prime Minister Scott Morrison announcing the extension of the JobKeeper programme has gone down well with investors. The programme has been pushed out until March next year in the hope of keeping more Australians working in the private sector supported until the economy gains momentum and can transition back.

The extension of the stimulus package comes as the growing number of coronavirus cases in Australia is causing alarm among government officials. Melbourne, Australia’s second largest city is already back under lockdown.

Retail sales were also supportive of the Australian dollar, increasing +2.4% in June, a solid reading following the 16.9% surge in may. However, there is growing evidence of stock piling once more as fears grow over more lock down restrictions.

The US dollar is trading at a 4-month low versus a basket of currencies (the dollar Index) despite a risk off mood in the market and alternative safe haven assets, such as gold soaring.

Elevated US – China tensions are adding to the risk off climate as Trump orders China to shut its consulate in Houston in an unprecedented move. Typically the US dollar advances when geopolitical tensions rise. However, that is not the case today.

There are many factors contributing to US dollar weakness. Firstly, the euro is enjoying a surge in popularity due to EU leaders agreeing to a €750 billion EU recovery fund to assist the countries most stricken by the pandemic.

Additionally, President Trump’s comments that the coronavirus outbreak may get worse before it gets better has resulted in investors turning their back on the US owing to a lack of confidence from the White House.

AUD/US Dollar Exchange Rate

Today’s Forex Rates

AUD/US Dollar FX Polls

Economic Events

Technical Indicators

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 0.68.

The projected upper bound is: 0.73.

The projected lower bound is: 0.70.

The projected closing price is: 0.72.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 33 white candles and 17 black candles for a net of 16 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 85.4166. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 72.99. This is where it usually tops. 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 30 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 180.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.002 at 0.715. Volume was 63% below average (consolidating) and Bollinger Bands were 38% narrower than normal.

Open    High     Low     Close     Volume
0.714   0.716    0.713   0.715     36,699
Technical Outlook
Short Term:        Overbought
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period     50-period     200-period
Close:           0.70          0.69          0.67
Volatility:      10            14            15
Volume:          84,368        93,721        75,597

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 7.0% 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 moderate flows of volume into AUD= (mildly bullish). Our trend forecasting oscillators are currently bullish on AUD= and have had this outlook for the last 1 periods. Our momentum oscillator is currently indicating that AUD= is currently in an overbought condition.

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