Home FX AUD Australian Dollar: USD/AUD (AUD=X) expect a lot of selling

Australian Dollar: USD/AUD (AUD=X) expect a lot of selling

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Australian Dollar: USD/AUD (AUD=X) expect a lot of selling

The Australian dollar has rallied significantly during the trading session on Thursday from extremely low levels. That being said though, there are plenty of areas where the Australian dollar is going to run into trouble above, so quite frankly this is not the time to be buying. IEC the 0.66 level as an area that will be little bit resistive, but after that, it’s very likely that the market could go towards the 0.67 handle. That is an area that is crucial from a longer-term standpoint, and therefore I would expect a lot of selling in that area.

The Australian dollar of course is very sensitive to what goes on in Asia, and then by extension China. As long as there is a lot of disruption in China, it will have a major influence on what happens with the Australian economy, as they supply so much in the way of commodities and raw materials for the Chinese economic engine, not only from the export side but also from the construction side. A perfect proxy for the Australian dollar most of the time is going to be the copper market, which have been taken out to the woodshed. Because of this, the Australian dollar will continue to suffer and for myself, I am not interested in buying the Aussie dollar until it closes above the 0.6775 handle on at least a daily chart, if not a weekly chart. The Australian dollar still has further to go to the downside given everything that’s going on in Asia.

Technical Indicators

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 0.67.

The projected upper bound is: 0.66.

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 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 20 white candles and 27 black candles for a net of 7 black candles.

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 14.8823. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 2 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 28.99. 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 13 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 -117.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -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 sell 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.003 at 0.657. Volume was 42% above average (neutral) and Bollinger Bands were 16% wider than normal.

Open     High      Low     Close     Volume___
0.654 0.659 0.654 0.657 69,954
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.66 0.68 0.68
Volatility: 8 8 8
Volume: 56,647 51,219 60,757

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 4.0% 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 32 periods. Our momentum oscillator is currently indicating that AUD= is currently in an oversold condition.

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S. Jack Heffernan Ph.D. Economist at Knightsbridge holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Crypto, Mining, Shipping, Technology and Financial Services.