Australian Dollar: USD/AUD (AUD=X) remains pressured despite a modest improvement in investor risk appetite
The Australian dollar remains pressured with traders paying scant regard to a modest rebound in stocks and commodities on Tuesday.
With the exception of the Japanese yen and British pound, the movements in the AUD elsewhere were negligible despite renewed confidence from US President Donald Trump that a trade deal with China will be reached.
Trump described the recent escalation in trade tensions with China as “a little squabble”. He also denied that recent tariff increases meant that trade talks had broken down.
“We’re having a little squabble with China because we’ve been treated very unfairly for many, many decades,” Trump told Reuters. He added later that: “We have a dialogue going. It will always continue.”
That followed a string of tweets from Trump earlier in the session that were far more conciliatory in tone compared to those seen over the past week.
“When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense,” Trump wrote.
As for the prospects of a deal, Trump claimed “it will all happen, and much faster than people think!”
The flurry of trade-related headlines and tweets helped stocks and commodities rebound after big falls to start the week. However, the gains were modest and largely unconvincing, suggesting there’s still a fair degree of angst in markets about the prospect of near-term trade deal.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 0.71.
The projected upper bound is: 0.70.
The projected lower bound is: 0.68.
The projected closing price is: 0.69.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 10.0001. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 12 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 31.60. 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 102 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 -167.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 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 16 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.001 at 0.693. Volume was 10% below average (neutral) and Bollinger Bands were 28% wider than normal.
Open High Low Close Volume___
0.694 0.695 0.691 0.693 89,028
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.70 0.71 0.72
Volatility: 7 8 10
Volume: 93,627 94,380 106,666
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 3.1% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of AUD= (mildly bearish). Our trend forecasting oscillators are currently bearish on AUD= and have had this outlook for the last 14 periods.
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