Australian Dollar: USD/AUD (AUD=X) broke out of its Asian session consolidative trading range

Australian Dollar: USD/AUD (AUD=X) broke out of its Asian session consolidative trading range

Australian Dollar: USD/AUD (AUD=X) broke out of its Asian session consolidative trading range

The AUD/USD pair finally broke out of its Asian session consolidative trading range and spiked to fresh session tops, around the 0.7015 region in the last hour.

The pair built on the previous session’s post-RBA bounce from 50-day SMA support and continued gaining positive traction for the second consecutive session on Wednesday, recovering a major part of a sharp intraday pullback witnessed on the first trading day of the week. 

The ongoing slide in the US Treasury bond yields, falling to fresh multi-year tops, kept the US Dollar bulls on the defensive, which was eventually seen as one of the key factors behind the pair’s latest leg of a sudden upsurge or around 25-pips over the past hour or so. 

This coupled with possibilities of some intraday trading stops being triggered on a sustained move beyond the key 0.70 psychological mark, coupled with improving risk sentiment further seemed to have collaborated towards accelerating the positive momentum.

Apart from the mentioned factors, the uptick lacked any obvious fundamental catalyst and might fizzle out rather quickly amid fading optimism over any near-term US-China trade deal, which remains a key driver of the sentiment surrounding the China-proxy Australian Dollar. 

Wednesday’s US economic docket – featuring the releases of ADP report on private-sector employment and ISM non-manufacturing PMI will now be looked upon for some short-term trading opportunities later during the early North-American session.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 0.71.

The projected lower bound is: 0.70.

The projected closing price is: 0.70.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.

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 56.1798. This is not an overbought or oversold reading. The last signal was a sell 2 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 61.68. 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 32 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 104.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 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 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.004 at 0.703. Volume was 26% below average (neutral) and Bollinger Bands were 17% wider than normal.

Open High Low Close Volume___
0.699 0.704 0.698 0.703 67,555

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period     50-period     200-period
Close: 0.70 0.70 0.71
Volatility: 8 7 9
Volume: 79,829 86,994 103,255

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 0.9% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 7 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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