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Australian Dollar: USD/AUD (AUD=X) Further escalation in Australia – China tensions

Australian Dollar: USD/AUD (AUD=X) Further escalation in Australia – China tensions

There have been reports about China trade retaliation following the 80% tariff on barley imports from Australia for the next 5 years together with Chinese officials having drawn up a list regarding potential goods including seafood, oatmeal and fruit that could be subject to stricter quality checks, anti-dumping probes, tariffs or customs delays.

Primary items such as iron ore, coal and natural gas are excluded even though reports suggest coal imports from Australia could be tightened, according to a daily note from China Coal Market, affiliated with China Coal Transport and Distribution Association.

FX Polls

Economic Events

Shayne Heffernan Trade Idea

“Looking at the big picture today, even though the USD is generally strong, it has not taken a great deal growth here against the AUD, displaying that the AUD is one of the stronger currencies. The best potential right here is therefore probably going to be on the long trade side over the near future.

The technical picture supports a cautiously bullish approach as the line of least resistance is definitely upwards, as we have a bunch of support levels just beneath the price now.

I will take a bullish bias if we reach a bounce today between 0.6556 and 0.6515 to trigger a long trade entry. If the USD starts to weaken again, that ought to be an excellent trade.” Shayne Heffernan PhD in Economics

Technical Analysis

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 0.64.

The projected upper bound is: 0.68.

The projected lower bound is: 0.64.

The projected closing price is: 0.66.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white 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 81.5831. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 14 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 60.88. 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 42 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 135.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 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 buy 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.003 at 0.657. Volume was 51% below average (consolidating) and Bollinger Bands were 52% narrower than normal.

Open     High       Low        Close       Volume
0.660    0.660      0.655      0.657       42,060
Technical Outlook
Short Term:        Overbought
Intermediate Term: Bullish
Long Term:         Bearish
Moving Averages: 10-period      50-period          200-period
Close:           0.65           0.63               0.67
Volatility:      14             21                 14
Volume:          86,589         104,157            68,996

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 1.4% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 1 periods.

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