Australian Dollar: USD/AUD (AUD=X) Australian Dollar Breaks Out

Australian Dollar: USD/AUD (AUD=X) Australian Dollar Breaks Out

Australian Dollar: USD/AUD (AUD=X) Australian Dollar Breaks Out

The Australian dollar rallied rather significantly during the week, breaking towards the 0.70 level. I think at this point it’s very likely that we will see a lot of resistance in that area, due to the fact that it is a large, round, psychologically significant figure. With the lack of liquidity coming, I think that we will get that pullback but I also believe that the Australian dollar is highly likely to see a lot of volatility during the next couple of months as the US/China trade situation continues to be a main driver of what happens with the Aussie dollar. This is a very strong turn of events, and during the week we even broke above the 50 week EMA. I like the idea of buying short-term pullbacks, taken advantage of the market when it is offering value.

The 0.69 level underneath should offer support, and as long as we can stay above there it’s likely that we could continue to go towards the 0.71 handle. If we can break above the 100% Fibonacci retracement level in that same area, that leads this market to much higher moves, possibly as high as the 0.7350 level. All things being equal, the Australian dollar will move right along with the Chinese economy and the outlook for China itself due to the trade situation, so those headlines will continue to cause a lot of noise. Building up a position slowly is probably the best way to go going forward. I have no interest in shorting this market as things stand right now.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 0.69.

The projected upper bound is: 0.70.

The projected lower bound is: 0.69.

The projected closing price is: 0.70.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend (which appears to be the case with FOREX AUD=) it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend it is called a bullish hammer.

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).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 89.9196. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 16 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 69.78. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 157.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 19 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.000 at 0.698. Volume was 100% below average (consolidating) and Bollinger Bands were 11% wider than normal.

Open     High      Low     Close     Volume___
0.698 0.698 0.697 0.698 65
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 0.69 0.69 0.69
Volatility: 5 7 7
Volume: 33,425 44,960 68,999

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 1.1% above its 200-period moving average and is in an upward trend. Volatility is low 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 11 periods.

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