Australian Dollar: USD/AUD (AUD=X) continues to see a lot of selling pressure
The Australian dollar has initially tried to rally during the trading session on Tuesday, but continues to see a lot of selling pressure, mainly because of the coronavirus. After all, the Chinese economy is flat on its back so it’s very likely we will continue to see a lot of selling pressure when it comes to all things China related, and by extension the Australian economy. Ultimately, the demand for copper is a good proxy for the Australian economy as well, as most of the Forex trading is done looking at things like commodity exports to the mainland.
Furthermore, it appears that the Reserve Bank of Australia is likely to cut rates in the near future, and that of course weighs upon the Australian dollar. Ultimately, I do think that we will continue to go lower, as has been seen so far this week. Fading rallies continues to work and in my estimation, we will probably go looking towards the bottom of the financial crisis low which is closer to the 0.63 handle. With this being the case, I do believe that there is a bit of a “ceiling” closer to the 0.67 handle, which should continue to attract a lot of selling pressure based upon the recent action. If we were to break above the 0.6775 handle, then it’s likely that we could go much higher, perhaps reaching towards the 0.70 level over the longer term. It does look as if we are trying to go lower, but if that scenario was the play out you would have to follow right along.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 0.68.
The projected upper bound is: 0.67.
The projected lower bound is: 0.65.
The projected closing price is: 0.66.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 26 black candles for a net of 5 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 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 20.9756. This is not an overbought or oversold reading. The last signal was a buy 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 27.12. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 11 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 -141.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 10 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.000 at 0.660. Volume was 16% above average (neutral) and Bollinger Bands were 8% narrower than normal.
Open High Low Close Volume___
0.660 0.662 0.658 0.660 57,008
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.67 0.68 0.68
Volatility: 6 7 7
Volume: 53,660 50,107 60,924
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 3.6% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of AUD= (mildly bearish). Our trend forecasting oscillators are currently bearish on AUD= and have had this outlook for the last 30 periods. Our momentum oscillator is currently indicating that AUD= is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.
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