Australian Dollar: USD/AUD (AUD=X) China to dictate what direction the Australian dollar will move

Australian Dollar: USD/AUD (AUD=X) China to dictate what direction the Australian dollar will move

Australian Dollar: USD/AUD (AUD=X) China to dictate what direction the Australian dollar will move

The Aussie underperformed in the weeks of broad US dollar strength following the FOMC and ECB mid-June meetings but so far in July it has been near the middle of the G10 pack.
Weighing on AUD have been a pullback in key commodity prices, especially metals,
  • bouts of investor concern over US-China trade tensions
  • and the Fed’s ongoing optimism on the US economy.
But support on dips has come from
  • the relative brevity of trade-driven equity declines
  •  and Australian data generally decent enough for the RBA to maintain its bullish growth forecasts.

Some of the downside risks to the global growth outlook had increased over the prior month. Additional tariff measures had been confirmed in a number of economies in prior weeks and the prospect of further measures being introduced appeared to have become more likely.

Members noted that trade tensions extended beyond the United States and China, and could escalate through non-tariff measures such as administrative delays. An escalation of trade tensions could harm global growth by undermining confidence and delaying investment decisions and could dampen international trade.

In China, indicators of economic activity had been mixed in May. Growth in retail sales had fallen sharply, while growth in some categories of industrial output had continued to strengthen. In particular, strong demand for steel had supported prices at high levels and encouraged production. This, in turn, had underpinned demand for Australian exports of coal and iron ore.

The overall message is that credit conditions are still tightening.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 0.75.

The projected lower bound is: 0.73.

The projected closing price is: 0.74.

Candlesticks

A black body occurred (because prices closed lower 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 22 white candles and 28 black candles for a net of 6 black 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.

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 36.8255. This is not an overbought or oversold reading. The last signal was a sell 5 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 44.05. 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 50 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 -48. This is not a topping or bottoming area. 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 10 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.000 at 0.738. Volume was 98% below average (consolidating) and Bollinger Bands were 46% narrower than normal.

Open High Low Close Volume___
0.739 0.739 0.738 0.738 2,272

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 0.74 0.75 0.77
Volatility: 10 10 9
Volume: 92,143 101,255 91,077

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 3.9% below its 200-period moving average and is in an downward 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 bearish on AUD= and have had this outlook for the last 21 periods.

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