Australian Dollar: USD/AUD (AUD=X) finding support

Australian Dollar: USD/AUD (AUD=X) finding support

Australian Dollar: USD/AUD (AUD=X) finding support

The Australian dollar has broken down significantly during the trading session on Tuesday, even slicing below the 0.6750 level. However, we have seen some buying just below there so I believe that there is significant support between here and the 0.67 handle, so it’s very likely that the Australian dollar will is due for a bounce. We have the FOMC Statement tomorrow, and I believe that the market is probably going to be paying attention to that more than anything else. That being said, it’s very important to think about the tone of the Federal Reserve more than anything else, because we already know that Asia is struggling. That being said though, if the Fed sounds like it’s getting a bit more dovish, there is a complete realigning of the markets just waiting to happen.

This is more or less the idea of an investment than a trade. The Australian dollar is currently sitting just above the range that we had seen after the great financial crisis, so therefore one would have to think that we could be getting close to a turning. We need to see good news coming out of Asia in order to see the Australian dollar rally significantly, or we could see the Federal Reserve look to loosen monetary policy which would have the same effect. The statement on Wednesday could be crucial, so pay attention to the tone. That being said though, it does look like people are willing to step in and pick up a bit of value. Again though, this is more of an investment and less of a trade.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 0.68.

The projected lower bound is: 0.67.

The projected closing price is: 0.68.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 6 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.

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 12.0689. 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 26.57. 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 sell 18 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 -209.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 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 15 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.001 at 0.675. Volume was 16% above average (neutral) and Bollinger Bands were 37% wider than normal.

Open     High      Low     Close     Volume___
0.676 0.677 0.674 0.675 57,582
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.68 0.69 0.69
Volatility: 6 7 7
Volume: 51,581 46,247 64,540

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 1.8% 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 10 periods. Our momentum oscillator is currently indicating that AUD= is currently in an oversold condition.

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