Australian Dollar: USD/AUD (AUD=X) growing dissent within the Federal Reserve

Australian Dollar: USD/AUD (AUD=X) growing dissent within the Federal Reserve

Australian Dollar: USD/AUD (AUD=X) growing dissent within the Federal Reserve

AUD/USD extends the rebound from earlier this week as there appears to be a growing dissent within the Federal Reserve, and recent price action raises the risk for a large recovery as the exchange rate initiates a series of higher highs & lows.

Even though the Federal Open Market Committee (FOMC) is widely anticipated to deliver another 25bp rate-hike at the next quarterly meeting in December, fresh remarks from St. Louis Fed President James Bullard, who rotates into the FOMC in 2019, appears to be gaining attention as the policymaker argues that U.S. interest rates are ‘close to neutral.’

In turn, a growing number of Fed officials may soften the hawkish outlook for monetary policy as ‘there just isn’t that much inflation pressure in the U.S. economy,’ and Chairman Jerome Powell & Co. may continue to project a longer-run interest rate of 2.75% to 3.00% as signs of slowing job/wage growth curb the risk for above-target inflation.

Overall, the bias in prices is: Downwards.

Short term: Prices are moving.

By the way, prices are vulnerable to a correction towards 0.73.

The projected upper bound is: 0.72.

The projected lower bound is: 0.70.

The projected closing price is: 0.71.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 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.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 38.4616. This is not an overbought or oversold reading. The last signal was a buy 1 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 39.52. 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 110 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 -65. This is not a topping or bottoming area. The last signal was a buy 1 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 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.000 at 0.710. Volume was 98% below average (consolidating) and Bollinger Bands were 25% wider than normal.

Open High Low Close Volume___
0.710 0.710 0.710 0.710 2,074

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 0.71 0.72 0.76
Volatility: 9 11 10
Volume: 98,909 102,237 101,277

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 6.0% 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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