Australian Dollar: USD/AUD (AUD=X) extends the decline amid waning hopes for an imminent US-China trade deal

Australian Dollar: USD/AUD (AUD=X) extends the decline amid waning hopes for an imminent US-China trade deal

Australian Dollar: USD/AUD (AUD=X) extends the decline amid waning hopes for an imminent US-China trade deal

The recent rebound in AUD/USD continues to unravel as China signaled it would retaliate against the Trump administration for blacklisting 8 tech companies, with China’s Foreign Ministry spokesman, Geng Shuang, urging the US to “immediately correct its mistake, withdraw the relevant decision and stop interfering in China’s internal affairs.”

During the press conference, Mr. Shuang went on to say that “the US violates the basic norms governinginternational relations, interferes in China’s internal affairs and undermines China’s interests,” and the comments suggest the trade talks starting on October 10 will bear little fruit as the Foreign Ministry pledges to “take resolute and powerful measures to safeguard our sovereignty, security and development interests.”

The RBA may continue to push monetary policy into uncharted territory as the central bank gauges the effective lower bound (ELB) for the official cash rate (OCR), and it seems as though Australian policymakers will have little choice but to deploy non-standard measures as Governor Philip Lowe insist that unconventional monetary policy tools (UMPTs) “have proved to be an effective addition to central banks’ policy toolkit.”

With that said, it remains to be seen if the RBA will deliver another 25bp rate cut at the next meeting on November 5as Governor Lowe pushes for “a renewed focus on structural measures to lift the nation’s productivity performance,”but the Australian Dollar may face a more bearish fate over the remainder of the year as the central bank continues to combat the weakening outlook for the Asia/Pacific region.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 0.68.

The projected upper bound is: 0.68.

The projected lower bound is: 0.66.

The projected closing price is: 0.67.

Candlesticks

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 22 white candles and 27 black candles for a net of 5 black candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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).

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 51.9162. This is not an overbought or oversold reading. The last signal was a buy 10 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 41.48. 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 44 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 -56. This is not a topping or bottoming area. The last signal was a buy 4 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 13 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.000 at 0.673. Volume was 25% below average (neutral) and Bollinger Bands were 6% wider than normal.

Open     High      Low     Close     Volume___
0.673 0.675 0.672 0.673 52,510
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.67 0.68 0.70
Volatility: 7 7 8
Volume: 60,132 70,377 85,919

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 3.7% below its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 7 periods.

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