Australian Dollar: USD/AUD (AUD=X) falls back below 69 US cents, US trade deficit at three-year low

Australian Dollar: USD/AUD (AUD=X) falls back below 69 US cents, US trade deficit at three-year low

Australian Dollar: USD/AUD (AUD=X) falls back below 69 US cents, US trade deficit at three-year low

The Australian dollar has fallen back below 69 US cents and is weaker against a basket of currencies, as the US dollar rises after America’s trade deficit fell to a three-year low.

The Australian dollar traded above 70 US cents at the very start of the new year, but has tracked lower over the past week.

Stronger economic data out of the United States contributed to the Aussie dollar’s decline against the greenback overnight.

Amid the US-China trade dispute, US imports fell and exports rose in November, while the closely-watched goods deficit with China tumbled by more than 15 per cent.

The US services sector strengthened, with data showing an improvement in non-manufacturing business activity.

However, it was not only a stronger US dollar that hurt the Australian dollar. Domestically, analysts have begun to weigh up the economic impact of a devastating, and ongoing, bushfire season.

On Tuesday, the ANZ-Roy Morgan weekly survey of consumer confidence fell to its lowest level in more than four years.

“A drop in confidence at the start of the year is unusual and almost certainly reflects the impact of the catastrophic bushfires over the weekend,” said ANZ’s head of Australian economist David Plank.

ANZ’s monthly indicator of job advertisements fell 6.7 per cent in December, with economists also blaming the impact of the bushfires.

“Based on previous major natural disasters, such as Victoria’s Black Saturday fires and Queensland’s 2010-11 floods, the current bushfires could see a short-term negative impact on employment,” said ANZ senior economist Catherine Birch.

Global markets mixed overnight

In Europe, the German DAX gained ground, while markets in Paris and London were little changed.

On Wall Street, the three major US indices were mixed in late trade, and all closed lower.

Oil prices retreated after their recent rally, which was fuelled by the escalating tensions between the US and Iran.

The mixed moves globally have provided little direction for the Australian share market, with SPI 200 futures moving between gains and losses ahead of the start of the local session.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 0.69.

The projected upper bound is: 0.69.

The projected lower bound is: 0.68.

The projected closing price is: 0.69.

Candlesticks

During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 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 11.2088. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 3 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 43.32. 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 sell 4 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 -131.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed unchanged at 0.687. Volume was 25% above average (neutral) and Bollinger Bands were 16% wider than normal.

Open     High      Low     Close     Volume___
0.687 0.688 0.685 0.687 64,909
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.70 0.69 0.69
Volatility: 9 7 8
Volume: 44,977 45,804 67,216

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 0.4% below its 200-period moving average and is in an upward 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 bullish on AUD= and have had this outlook for the last 18 periods.

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