Australian Dollar: USD/AUD (AUD=X) has sold off sharply
A new report from three major financial institutions is suggesting that the Aussie economy could have more headwinds ahead, led by significant job losses.
The reports from AMP, KPMG and UBS all point to major job losses in both the retail sector and construction.
The reports point to 50,000 job losses in retail, while the further contraction in building and construction (which we saw with yesterday’s data), suggests that we could see a similar number of losses in the construction industry.
Both construction and retail are two of the main industries for jobs (in terms of volume) in Australia and represent entry-level opportunities for many.
Australia has just been through a once in a generation housing and construction boom and job losses are almost a given.
By a weak economy overall would likely lead to a sector like retail feeling the pinch.
The experts suggest that as job losses increase there will be more pressure on the RBA to cut rates twice this year. This is despite the RBA’s Lowe coming out and saying the employment is one of the strongest areas of the economy.
But as we know, the RBA is often a lagging indicator of what is actually going on.
The AUD/USD couldn’t break the major level at 0.7200 and has sold off sharply.
0.7050 and then 0.7000 are my next two key support levels below, with 0.7100 key support.
0.7200 is R1 and 0.7300 is R2 and the most recent highs sitting at 0.7400.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 0.72.
The projected upper bound is: 0.72.
The projected lower bound is: 0.70.
The projected closing price is: 0.71.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.
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 50.6328. This is not an overbought or oversold reading. The last signal was a sell 5 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 44.42. 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 48 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 -29. This is not a topping or bottoming area. The last signal was a sell 1 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 buy 7 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.005 at 0.709. Volume was 9% below average (neutral) and Bollinger Bands were 15% narrower than normal.
Open High Low Close Volume___
0.714 0.717 0.709 0.709 102,029
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.71 0.71 0.73
Volatility: 10 11 11
Volume: 107,109 104,452 108,443
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 2.2% 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 11 periods.
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