Australian Dollar: USD/AUD (AUD=X) concerns over the economy
The Australian Dollar retreated from three-month highs Tuesday after a sell-off in international stocks that sent a frosty wind through currency markets.
Stock markets in the U.S. and Asia slumped late in the Monday session after the National Association of Home Builders (NAHB) Housing Market index posted a surprise fall to its lowest level since July 2016.
The NAHB index fell to 60 in November, down from 68 previously when markets had looked for a decline to only 67, as confidence about the business outlook among builders of new homes plummeted.
Respondents to the survey cited increased caution among home buyers, who the NAHB says are becoming more hesitant about purchases due to concerns over rising interest rates and the high level of home prices.
NAHB’s data initially sent the greenback lower and helped keep the AUD/USD rate steady. But it wasn’t long before concerns over the economy, as well as the so-called “trade war”, sent stocks markets and the Aussie lower.
Australia’s currency is underwritten substantially by a mammoth stream of commodity exports to China so anything that impacts sentiment toward the world’s second largest economy also tends to have an effect on the Aussie.
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 big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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.
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 67.2620. This is not an overbought or oversold reading. The last signal was a sell 0 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 51.79. 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 139 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 15. This is not a topping or bottoming area. The last signal was a sell 0 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 26 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.007 at 0.722. Volume was 10% above average (neutral) and Bollinger Bands were 44% wider than normal.
Open High Low Close Volume___
0.729 0.730 0.721 0.722 121,553
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.72 0.72 0.74
Volatility: 12 11 10
Volume: 128,894 115,562 105,734
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 3.0% 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 10 periods.
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