Australian Dollar: USD/AUD (AUD=X) Continue to Pressure Upside

Australian Dollar: USD/AUD (AUD=X) Continue to Pressure Upside

Australian Dollar: USD/AUD (AUD=X) Continue to Pressure Upside

The Australian dollar has initially pulled back during the trading session on Tuesday, reaching towards the 0.65 handle. However, we have seen a lot of support at that area and then turned around to rally to the upside. The 0.66 level is a target that short-term traders will be looking to, but if we can break above there it’s very likely that the markets will go looking towards the 0.67 level. I anticipate that there is quite a bit of resistance in that area, so I would be all over any signs of weakness near that region to start shorting again.

To the downside, the market is very likely to find the 0.65 level as supportive, but more than likely we will go lower than that if we retest that area. The market is currently trading in the same range it had been trading in during the financial crisis, so there should be a ton of support from a longer-term standpoint in this area. However, the Australian dollar continues to suffer at the hands of the Chinese economic situation which of course has been very soft to say the least. However, the Federal Reserve is likely to cut rates and I think that’s part of what people were paying attention to. It does look as if the Aussie is trying to form a bottom, but that is something that can be said at several different junctures. I will be looking at the weekly candlestick before I trying to buy this pair. In the short term, I still look at the 0.67 level as a potential selling range.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 0.67.

The projected upper bound is: 0.67.

The projected lower bound is: 0.65.

The projected closing price is: 0.66.

Candlesticks

A white body occurred (because prices closed higher 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 21 white candles and 27 black candles for a net of 6 black candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 70.6171. This is not an overbought or oversold reading. The last signal was a buy 3 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 42.55. 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 1 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 -14. This is not a topping or bottoming area. The last signal was a buy 1 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.003 at 0.661. Volume was 7% above average (neutral) and Bollinger Bands were 37% wider than normal.

Open     High      Low     Close     Volume___
0.658 0.663 0.657 0.661 54,427
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.66 0.68 0.68
Volatility: 11 8 8
Volume: 70,551 54,840 60,650

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 3.3% below its 200-period moving average and is in an downward 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 bearish on AUD= and have had this outlook for the last 36 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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