Australian Dollar: USD/AUD (AUD=X) Prices May Stall this Week

Australian Dollar: USD/AUD (AUD=X) Prices May Stall this Week

Australian Dollar: USD/AUD (AUD=X) Prices May Stall this Week

Friday’s trade saw a significant rally higher in the AUD/USD exchange rates pair. The Australian dollar had continued a massive move lower the previous day (23-08-2018) that began at the 0.7370 value area on the 22nd down to the 0.7239; depending on the data feed this was the biggest single day drop for the calendar year.

Lloyd’s and Swissquote both reported that the drive lower was due to political upheaval and uncertainty in the leadership of the Prime Minister’s position.

That uncertainty has changed. ABN AMBRO reports that the new Prime Minister, Scott Morrison, has replaced Malcolm Turnbull. This is the 5th Prime Minister in Australia in 5 years. The market has reacted favorably to this news because in one hour the AUD/USD pair rallied 0.71% or 51.8 pips from 0.7323 to 0.7244.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 0.75.

The projected upper bound is: 0.74.

The projected lower bound is: 0.72.

The projected closing price is: 0.73.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 40.0001. This is not an overbought or oversold reading. The last signal was a sell 2 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 46.93. 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 78 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 14. This is not a topping or bottoming area. The last signal was a buy 6 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 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.001 at 0.732. Volume was 99% below average (consolidating) and Bollinger Bands were 5% wider than normal.

Open High Low Close Volume___
0.732 0.733 0.731 0.732 512

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

Moving Averages: 10-period 50-period 200-period
Close: 0.73 0.74 0.76
Volatility: 13 11 10
Volume: 99,880 102,311 95,523

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 4.1% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 10 periods.

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