Australian Dollar: USD/AUD (AUD=X) currently in a major “risk off” type of situation

Australian Dollar: USD/AUD (AUD=X) currently in a major “risk off” type of situation

Australian Dollar: USD/AUD (AUD=X) currently in a major “risk off” type of situation

The Australian dollar has broken down significantly during the trading session in a major “risk off” type of situation, as the oil markets have fallen apart and of course commodity currencies in general have all been hit rather hard. However, as we tested that major support level from the longer-term timeframe, the market bounced extremely hard. At this point, it’s all about the US dollar getting hit by almost every asset possible. Short-term pullback should be buying opportunities but if we find ourselves testing that low again, then it becomes a massive “buy-and-hold” type of situation where the Australian dollar could be something that you hang onto for several months, if not years. This will be especially true if the situation in Asia starts to get better and the coronavirus starts to get under control.

Ultimately, this is a market that will be very volatile, but it is at such extended low levels that it’s difficult to imagine a scenario where it is going to break down much further than it has already tried. Quite frankly, that would be pricing and something akin to Armageddon.

To the upside I see the 0.6775 level as a major barrier but if we can break above it then it opens up the door to much higher prices, and that trend change will see this market going to the 0.70 level, and then the 0.7250 level, and so on. I have no interest in shorting this pair after this type of bounce.

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 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 18 white candles and 30 black candles for a net of 12 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 78.1817. 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 41.43. 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 5 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 4. This is not a topping or bottoming area. The last signal was a buy 0 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 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed unchanged at 0.659. Volume was 99% below average (consolidating) and Bollinger Bands were 25% wider than normal.

Open     High      Low     Close     Volume___
0.659 0.659 0.658 0.659 425
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.66 0.67 0.68
Volatility: 12 9 8
Volume: 73,569 57,069 60,114

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 3.6% 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 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 40 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.