Australian Dollar: USD/AUD (AUD=X) momentum trending lower
The Australian Dollar is trading higher on Tuesday, recovering from early session weakness, after Reserve Bank of Australia policymakers decided to hold policy steady at 0.75%, as expected, while upgrading forward-guidance.
The final paragraph of the RBA’s monetary policy statement is steering Aussie Dollar prices higher. In it, the RBA said, “The easing of monetary policy since June is supporting employment and income growth in Australia and a return of inflation to the medium-term target range.” Traders interpreted this to mean that the central bank’s easing bias may no longer be warranted. Like the U.S. Federal Reserve, however, the RBA did leave the door open to ease further if needed.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at .6930 on October 31.
A trade through .6930 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through .6809.
The main range is .7082 to .6671. Its retracement zone at .6876 to .6925 is currently being tested. This zone is controlling the near-term direction of the AUD/USD.
The short-term range is .6809 to .6930. Its retracement zone is .6870 to .6855. This zone is the next downside target. Since the main trend is up, buyers are likely to come in on a test of this zone.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6908, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at .6876.
A sustained move over .6876 will indicate the presence of buyers. If this generates enough upside momentum then look for a rally into the Fibonacci level at .6925 and the main top at .6930.
Taking out .6930 will reaffirm the uptrend. This could trigger an acceleration to the upside. The daily chart indicates there is no visible resistance until the July 19 main top at .7082.
A sustained move under .6876 will signal the presence of sellers. The first target is the short-term retracement zone at .6870 to .6855. Look for buyers on the first test of this area. Further downside is expected if .6855 fails as support.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 0.68.
The projected upper bound is: 0.70.
The projected lower bound is: 0.68.
The projected closing price is: 0.69.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 23 black candles for a net of 3 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 67.4418. This is not an overbought or oversold reading. The last signal was a sell 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 61.05. 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 63 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 96. 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 18 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.001 at 0.689. Volume was 3% below average (neutral) and Bollinger Bands were 5% wider than normal.
Open High Low Close Volume___
0.688 0.693 0.687 0.689 61,914
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.69 0.68 0.70
Volatility: 6 7 8
Volume: 49,679 61,065 80,465
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 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 12 periods.