Australian Dollar: USD/AUD (AUD=X) extraordinarily week
The Australian dollar has broken down during the trading session on Wednesday, as we continue to see a lot of US dollar strength in of course people running away from anything in Asia. The Australian dollar has been extraordinarily week, and it certainly seems as if it is only a matter of time before we break down yet again. At this point, the market is likely to see continued negativity, and I think at this point it probably goes looking towards the 0.63 level which is the bottom of the range that we had been in during the financial crisis over a decade ago. Yes, we are that low as far as value is concerning.
Looking at the Australian dollar, you should keep in the back of your mind that it is highly levered to China, and at this point in time it’s likely that the market continues to get hammered as China is still fighting the virus and not quite back to work. As long as that is the case, there will be a lot of weight around the neck when it comes to the Aussie, as China is by far its biggest customer. As long as that’s the case, Australia continues to suffer. I do believe that the rate cuts will be coming rather soon, and the market is presently in the process of trying to price that in. Overall, rallies are to be sold and I think the 0.67 level above is essentially the “ceiling” in the market.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 0.68.
The projected upper bound is: 0.66.
The projected lower bound is: 0.65.
The projected closing price is: 0.65.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 20 white candles and 27 black candles for a net of 7 black candles.
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 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 12.2848. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 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 23.11. 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 12 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 -147.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 11 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 4 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.005 at 0.655. Volume was 25% above average (neutral) and Bollinger Bands were 5% wider than normal.
Open High Low Close Volume___
0.660 0.661 0.655 0.655 61,461
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.67 0.68 0.68
Volatility: 6 8 7
Volume: 54,471 50,579 60,817
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 4.2% 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 31 periods. Our momentum oscillator is currently indicating that AUD= is currently in an oversold condition.
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