Australian Dollar: USD/AUD (AUD=X) lifted by fresh hopes of U.S.-China breakthrough

Australian Dollar: USD/AUD (AUD=X) lifted by fresh hopes of U.S.-China breakthrough

Australian Dollar: USD/AUD (AUD=X) lifted by fresh hopes of U.S.-China breakthrough

The Australian Dollar rose Thursday as markets cheered fresh signs the White House could be willing to extend trade negotiations with China past a March 01 deadline, although new forecasts from UBS and Commonwealth Bank of Australia (CBA) suggest things are already about as good as they’ll get for the Antipodean currency. 

Bloomberg News reported Thursday that President Donald Trump is considering extending trade talks with China for another 60 days after the March 01 deadline that is currently scheduled to see U.S. tariffs on some imports from China more than double to 25%.

Thursday’s report comes barely a day after Trump told his cabinet in the White House that he is open to the idea of extending the talks if there is a credible prospect of a deal to end the trade war being reached. 

“The 10 percent on $200 billion goes up to 25 percent on March 1st. And so far, I’ve said don’t do that. Now, if we’re close to a deal where we think we can make a real deal, and it’s going to get done, I could see myself letting that slide for a little while. But generally speaking, I’m not inclined to do that,” Trump said. 

The South China Morning Post subsequently reported that President Xi Jingping will meet with U.S. Treasury Secretary Steve Mnuchin and negotiator Robert Lighthizer to participate personally in ongoing discussions. 

Both parties were repeatedly said this month to still be “worlds apart” on key issues like”coerced transfers of intellectual property” and state subsidisation of inustry. The White House says it will impose tariffs on all of China’s $513 bn of U.S-bound annual exports if its “unfair trade practices” aren’t abandoned.

Trump is already levying tariffs on $250 bn of Chinese goods imported into America each year, hurting the Chinese economy and the Australian Dollar, given the latter’s close correlation with the Renmimbi. 

All of this matters for Australia because the Antipodean currency is underwritten to a substantial extent by a huge bilateral commodity trade with China, which could be hurt if the world’s second largest economy goes on creaking under the weight of U.S. tariffs. 

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.

Candlesticks

A white body occurred (because prices closed higher 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 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 35.4396. This is not an overbought or oversold reading. The last signal was a buy 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 44.75. 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 38 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 -64. This is not a topping or bottoming area. The last signal was a buy 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 sell 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.001 at 0.710. Volume was 3% below average (neutral) and Bollinger Bands were 0% wider than normal.

Open High Low Close Volume___
0.709 0.713 0.707 0.710 110,131

Technical Outlook
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: 11 11 11
Volume: 100,275 107,007 108,362

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 2.4% below its 200-period moving average and is in an downward trend. Volatility is high 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 1 periods.

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