Australian Dollar: USD/AUD (AUD=X) Continues to Press Resistance

Australian Dollar: USD/AUD (AUD=X) Continues to Press Resistance

Australian Dollar: USD/AUD (AUD=X) Continues to Press Resistance

The Australian dollar initially pulled back a bit during the trading session on Wednesday, but turned around to show signs of strength, as we reached towards the 0.62 level. At this point, the market breaking above that level and the 61.8% Fibonacci retracement level which is just above there could send the Australian dollar much higher. Remember, the Australian dollar is highly sensitive to risk appetite so pay attention to how the markets are perceiving that right now. The stock markets continue to be extraordinarily resilient, but the question will be what happens going forward, and whether or not some of the rally is a relief rally, or if it is something a bit more important.

Australia is also highly sensitive to China, so if China starts to increase demand and output, that could be a good sign for the Australian dollar in general. That being the case, don’t expect any move to be easy to deal with, as there will be a lot of headlines out there that will cause concerns. Nonetheless, we do look as if we are trying to form some type of bottoming pattern, so on the breakout one would have to think that we will eventually go looking towards the 0.65 level, although how long it takes to get there could be just about anyone’s gas. To the downside, it looks as if the 0.60 level is now offering massive support. At this point, the Aussie certainly looks as if it is trying to build bullish pressure.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 0.64.

The projected lower bound is: 0.60.

The projected closing price is: 0.62.

Candlesticks

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 23 white candles and 27 black candles for a net of 4 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 88.0052. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 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 51.71. 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 12 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 118.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 12 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 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.001 at 0.622. Volume was 68% below average (consolidating) and Bollinger Bands were 50% wider than normal.

Open     High      Low     Close     Volume___
0.623 0.625 0.621 0.622 22,348
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.61 0.64 0.67
Volatility: 19 22 13
Volume: 122,300 88,931 64,737

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 7.6% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 62 periods.

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