The Australian dollar enjoyed a second consecutive week, but the rally met its limits. What’s next? Australia’s jobs report and wage data stand out. Here are the highlights of the week and an updated technical analysis for AUD/USD.
The Reserve Bank of Australia left the interest rate unchanged as expected. The rate statement and the quarterly inflation report did not shed new light on any change in interest rates, but it seems that the RBA is content with the current economic situation. The US Mid-Term elections resulted in a split government as expected. The greenback initially dropped but then recovered.
- NAB Business Confidence: Monday, 00:30. The National Australia Bank’s monthly survey of around 350 businesses rose to 6 points in September, up from 4, but below levels seen earlier in the year. A similar score is likely now. Any positive number reflects improving conditions.
- Westpac Consumer Sentiment: Tuesday, 23:30. Westpac’s survey of around 1,200 consumers has bounced by 1% in October after two months of declines. We will now get figures for November.
- Wage Price Index: Wednesday, 00:30. With improving job markets, the focus in developed countries moves to wages. Australian salaries increased by 0.6% in Q2 2018 and a similar rise is forecast for Q3. While wages are moving at a slightly faster pace in comparison to inflation, it is far from being inflationary.
- MI Inflation Expectations: Thursday, 00:00. The Melbourne Institute’s gauge of inflation expectations fills the gap: the government publishes price data only once per quarter. An annual increase of 4% was reported last time.
- Australian jobs report: Thursday, 00:30. Australia saw only a small gain in jobs in September: 5.6K, a disappointing outcome that weighed on the Aussie. And while the unemployment rate dropped to 5%, it went hand in hand with a drop in the participation rate, so it does not bode well for the economy. A substantial increase of 20.3K is expected for October with the unemployment rate moving up to 5.1%.
- Guy Debelle speaks: Thursday, 00:30. The RBA Assistant Governor will be talking in Melbourne and the focus is on the housing sector, which has seen some struggles lately. It will be interesting to hear what the central bank thinks about the situation in Sydney.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 0.73.
The projected lower bound is: 0.71.
The projected closing price is: 0.72.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
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.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 39.0805. 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 55.76. 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 133 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 52. This is not a topping or bottoming area. The last signal was a sell 1 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 20 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.001 at 0.721. Volume was 99% below average (consolidating) and Bollinger Bands were 31% wider than normal.
Open High Low Close Volume___
0.722 0.723 0.721 0.721 1,350
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.72 0.72 0.75
Volatility: 13 10 10
Volume: 110,094 109,312 104,815
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 3.3% below 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 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 4 periods.
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