Australian Dollar: USD/AUD (AUD=X) advancing after a government report showed China’s economy grew more than expected
The Australian Dollar is advancing on Wednesday after a government report showed China’s economy grew more than expected. The Aussie is benefitting because it often acts as a proxy for the Chinese economy. The news helped reverse some of the damage from the previous session caused by the somewhat dovish minutes from the Reserve Bank’s April policy meeting.
Earlier in the session, China reported its economy grew 6.4 percent in the first quarter of 2019, beating analysts’ expectations. Traders were looking for a 6.3 percent increase. The data suggests the Chinese economy may be bottoming after the government injected additional stimulus earlier in the year.
Based on the early price action and the current price at .7203, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the previous main top at .7207.
Taking out the main top at .7207 will reaffirm the uptrend and signal the buying is getting stronger. If this creates enough upside momentum, this could fuel an acceleration into a downtrending Gann angle at .7275, followed by another main top at .7296.
The inability to overcome and sustain a rally over .7207 will signal the return of sellers. They could be traders taking profits ahead of the Australian Employment report. A pull-back under the previous top at .7192 will indicate the selling is getting stronger. This could trigger a further decline into a support cluster at .7157 to .7153.
Watch for a technical bounce on the first test of .7157 to .7153, but if it fails then we’re likely to see a test of an uptrending Gann angle at .7135. If this angle fails then look for the AUD/USD to break sharply.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 0.71.
The projected upper bound is: 0.73.
The projected lower bound is: 0.71.
The projected closing price is: 0.72.
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 25 white candles and 24 black candles for a net of 1 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 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 82.8243. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 4 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 61.34. 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 buy 82 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 135.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 15 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 buy 23 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.002 at 0.720. Volume was 44% below average (neutral) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume___
0.717 0.720 0.715 0.720 57,404
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 0.71 0.71 0.72
Volatility: 7 8 10
Volume: 85,815 99,376 107,375
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 0.1% above its 200-period moving average and is in an upward trend. Volatility is 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 16 periods.
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