Australian Dollar: USD/AUD (AUD=X) Jobs and Housing Markets Falter Ahead of Key RBA Interest Rate Decision

Australian Dollar: USD/AUD (AUD=X) Jobs and Housing Markets Falter Ahead of Key RBA Interest Rate Decision

Australian Dollar: USD/AUD (AUD=X) Jobs and Housing Markets Falter Ahead of Key RBA Interest Rate Decision

The Australian Dollar fell into the new week Monday after surveys showed the jobs and housing markets struggling early in the New Year, just hours before the latest interest rate guidance is due from the Reserve Bank of Australia (RBA).

Fresh signs of weakness early in the New Year could be enough to ensure the RBA moves to a more “dovish” interest rate stance this week, vindicating the market for having bet increasingly during recent months that an interest rate cut cannot be that far off. 

Australian job advertisements fell by -1.7% in January alone and are now -3.7% below the level seen at the beginning of last year, suggesting momentum in the labour market may now be waining. 

“ANZ Australian Job Ads slipped into negative annual territory in January for the first time since March-April 2015. The decline in job ads is consistent with a range of other data suggesting the economy lost momentum in the second half of 2018,” says David Plank, an economist at Australia & New Zealand Banking Group (ANZ). 

Australia’s labour market has been a relative bright spot for an economy besieged by a litany of headwinds and risks during recent quarters, which have ranged from volatile commodity prices and a faltering housing market, to the U.S.-China trade war that has stoked fears for the global economy. 

House prices have been falling steadily in all of Australia’s major cities for a while now and official data released Monday suggested strongly that last year’s weakness was carried forward into 2019. 

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 0.72.

The projected upper bound is: 0.73.

The projected lower bound is: 0.71.

The projected closing price is: 0.72.

Candlesticks

A black body occurred (because prices closed lower 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 24 white candles and 25 black candles for a net of 1 black 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 75.3704. This is not an overbought or oversold reading. The last signal was a sell 0 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 56.88. 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 30 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 sell 0 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 3 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.002 at 0.723. Volume was 68% below average (consolidating) and Bollinger Bands were 32% narrower than normal.

Open High Low Close Volume___
0.724 0.725 0.722 0.723 36,782

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 0.72 0.72 0.73
Volatility: 12 11 11
Volume: 100,318 109,248 107,778

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 0.8% below its 200-period moving average and is in an upward 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 bullish on AUD= and have had this outlook for the last 16 periods.

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