Australian Dollar: USD/AUD (AUD=X) Dollar Roles Over
The Australian dollar has initially tried to rally a bit during the trading session on Wednesday but has rolled over to reach towards the 0.60 level. That level should be psychologically important but if it doesn’t hold, we could very well fall towards the lows again.
It should be noted that we failed at the 61.8% Fibonacci retracement level, and an area that had previously seen a bit of a gap. That should continue to be of interest, and therefore I think it’s important to pay attention to the overall risk appetite around the world as the Australian dollar is so highly sensitive to the global supply chain. After all, the commodities that a lot of the world runs on, i.e. China specifically, come directly from Australia and therefore the currency tends to be a bit of a proxy.
Looking at the chart, if we were to break above the 0.6250 level, then the market is likely to go towards the 0.65 handle and what would certainly be a “risk on” type of move. Ultimately, the market has a lot to choose through over the next couple of days so we will have to pay attention to how certain things come out, especially the jobs number on Friday which will be crucial. I suspect that the trading action is going to be extraordinarily difficult to handle, so therefore I would keep my position size relatively small as long as we continue to see this massive amount of volatility as you can get hurt rather quickly.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 0.63.
The projected upper bound is: 0.63.
The projected lower bound is: 0.59.
The projected closing price is: 0.61.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
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 58.9570. This is not an overbought or oversold reading. The last signal was a sell 1 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 40.60. 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 7 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 45. This is not a topping or bottoming area. The last signal was a buy 7 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 4 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.000 at 0.607. Volume was 60% below average (consolidating) and Bollinger Bands were 185% wider than normal.
Open High Low Close Volume___
0.607 0.609 0.606 0.607 26,393
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.60 0.65 0.68
Volatility: 19 20 12
Volume: 117,787 81,960 63,394
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 10.1% 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 57 periods.