Australian Dollar: USD/AUD (AUD=X) rejected by key moving-average, enters into retreat
The Australian Dollar was on its back foot Wednesday after being repelled from a key technical resistance barrier and as investors bet the Reserve Bank of Australia (RBA) will cut its interest rate again sooner rather than later, but multiple analysts are saying that further losses should be limited.
Australia’s Dollar has beat a retreat from a steady U.S. Dollar since being rejected by 200-day moving-average at 0.7075 last week, although much of what happens next will be determined by price action this Wednesday, according to technical analysts studying trends and momentum on the charts.
“AUD/USD continues to ease back from a very tough band of resistance, namely .7070/89. This is the 200 day [moving average} and the 8 month downtrend. The intraday Elliott wave counts have now turned more negative and we would allow for a dip back towards the 55 day MA at .6958,” says Karen Jones at Commerzbank. “The .6911 10th July low guards underlying support at .6865 the 17th May low and the mid June low at .6832.”
Jones has been betting against the Aussie since last week and is targeting a move down to 0.6960 for the AUD/USD rate, where she says she’ll close her trade. Her outlook for the exchange rate over the next three months is neutral. Analysts at MUFG, the world’s fifth largest bank and a significant currency dealer, say Wednesday’s fall shouldn’t necessarily mean an end to the six-week rally undergone by the Aussie.
“Friday’s failure of AUD/USD to break above resistance from highs recorded in April 2019 and December 2018 has shifted the momentum back to the downside,” writes Lee Hardman, an analyst at MUFG, in a note to clients. “We are not convinced that this will mark a sustained turn for AUD/USD and there are reasons to expect the downside to be relatively limited as well.”
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 0.70.
The projected upper bound is: 0.71.
The projected lower bound is: 0.69.
The projected closing price is: 0.70.
A white body occurred (because prices closed higher 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 26 black candles for a net of 2 black 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 8.2540. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 47.88. 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 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 -54. This is not a topping or bottoming area. The last signal was a sell 3 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.000 at 0.698. Volume was 96% below average (consolidating) and Bollinger Bands were 20% narrower than normal.
Open High Low Close Volume___
0.698 0.698 0.697 0.698 3,101
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.70 0.70 0.71
Volatility: 9 7 9
Volume: 50,667 75,752 98,667
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 1.6% below its 200-period moving average and is in an upward 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 bullish on AUD= and have had this outlook for the last 23 periods.
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