Australian Dollar: USD/AUD (AUD=X) gains as Fed keeps rates on hold

Australian Dollar: USD/AUD (AUD=X) gains as Fed keeps rates on hold

Australian Dollar: USD/AUD (AUD=X) gains as Fed keeps rates on hold

The Australian share market is expected to open lower this morning despite some modest gains on Wall Street overnight after the US central bank kept interest rates unchanged.

The SPI200 futures contract was down 29 points, or 0.4 per cent, at 6722 at about 7.40am AEDT, suggesting an early fall for the benchmark S&P/ASX200 on Thursday.

On Wall Street, the main stock indexes ended modestly higher on Wednesday after the US Federal Reserve held interest rates steady and signalled that borrowing costs are likely to remain unchanged indefinitely. The Dow Jones Industrial Average was up 0.11 per cent, the S&P 500 was up 0.29 per cent and the tech-heavy Nasdaq Composite was up 0.44 per cent.

The Australian dollar rose against against the US dollar on Thursday morning after the Federal Reserve held interest rates steady. The Aussie is now buying 68.81 US cents, up from 68.18 US cents on Wednesday.

Technical Indicators

Overall, the bias in prices is: Sideways.

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

The projected upper bound is: 0.70.

The projected lower bound is: 0.68.

The projected closing price is: 0.69.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with FOREX AUD=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 53.4312. This is not an overbought or oversold reading. 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 61.16. 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 89 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 120.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 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 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.007 at 0.688. Volume was 25% below average (neutral) and Bollinger Bands were 37% narrower than normal.

Open     High      Low     Close     Volume___
0.681 0.689 0.680 0.688 44,184
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.68 0.68 0.69
Volatility: 8 7 7
Volume: 44,368 49,732 72,839

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 downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of AUD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on AUD= and have had this outlook for the last 15 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.