Australian Dollar: USD/AUD (AUD=X) global trade war continues to weigh on risk appetite
The Australian dollar sagged late in the week, as it fell to an 8-week low on Friday. Australia releases key employment indicators. In the U.S, the Fed is expected to raise rates, and we’ll get a look at U.S Final GDP for the third quarter. Here are the highlights of the week and an updated technical analysis for AUD/USD.
In the U.S., consumer spending and inflation dropped in November, but still was within expectations. This helped boost the U.S. dollar last week. The global trade war continues to weigh on risk appetite, and the arrest of Huawei’s CFO Meng could complicate U.S-China trade talks.
- Monetary Policy Meeting Minutes: Tuesday, 00:30. The minutes will provide details of the RBA meeting earlier in December. At the meeting, the RBA said that low-interest rates continue to support the Australian economy, and the minutes will likely reiterate that the bank will continue current monetary policy.
- MI Leading Index: Tuesday, 23:30. The index continues to show little movement and the November release posted a weak gain of 0.1%.
- Employment Change: Thursday, 00:30. This indicator is the highlight of the week. The economy added 32.8 thousand in October, crushing the estimate of 19.9 thousand. The November forecast stands at 20.0 thousand.
- Unemployment Rate: Thursday, 00:30. Unemployment has remained pegged at 5.0% for two straight months. No change is expected in the November reading.
Overall, the bias in prices is: Sideways
The projected upper bound is: 0.73.
The projected lower bound is: 0.71.
The projected closing price is: 0.72.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with FOREX AUD=) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.
A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with FOREX AUD=) it is called a bullish hammer.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 41.3668. This is not an overbought or oversold reading. The last signal was a buy 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 42.82. 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 158 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 -97. This is not a topping or bottoming area. The last signal was a buy 4 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 7 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed unchanged at 0.718. Volume was 99% below average (consolidating) and Bollinger Bands were 15% narrower than normal.
Open High Low Close Volume___
0.718 0.718 0.717 0.718 1,151
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.72 0.72 0.74
Volatility: 7 10 10
Volume: 111,343 118,995 106,502
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 2.9% below its 200-period moving average and is in an downward trend. Volatility is low 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 bearish on AUD= and have had this outlook for the last 4 periods.
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