Australian Dollar: USD/AUD (AUD=X) retail sales dip
The Australian dollar had its worst week since October, falling 2.2 percent. The Aussie has declined 2.5% in February, erasing most of the gains seen in January. We’ll get a look at business and consumer confidence, both of which are struggling. Here is an outlook for the highlights of this week and an updated technical analysis for AUD/USD.
The RBA maintained the benchmark rate at 1.50%, despite pressure to ease policy in response to weakness in household spending and property prices. Retail sales, a key gauge of consumer spending, declined 0.4%, its first decline in a year.
- Home Loans: Monday, 7:30. Home loans has struggled, with three declines in the past four releases. A sharp decline of 2.0% is expected in the December release.
- NAB Business Confidence: Tuesday, 00:30. Business confidence slipped to 3 points in the past two releases, the weakest numbers since 2016. The business sector remains particularly concerned about the slowdown in China, which has hurt the Australian economy.
- Westpac Consumer Sentiment: Tuesday, 23:30. The survey of 1200 consumers indicated that consumer confidence sagged in January, with a sharp drop of 4.7%%. If the pessimistic mood affects consumer spending as well, economic activity could soften and drag down the Australian dollar.
- MI Infation Expectations: Thursday, 00:00. The Melbourne Institute looks at the inflation expectations of consumers, which helps analysts forecast inflation levels. The indicator dropped to 3.5% in January, its lowest level since October 2016.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 0.72.
The projected lower bound is: 0.70.
The projected closing price is: 0.71.
A black body occurred (because prices closed lower 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 22 white candles and 27 black candles for a net of 5 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 7.5252. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 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 41.65. 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 34 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 -115.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 down -0.001 at 0.709. Volume was 8% below average (neutral) and Bollinger Bands were 15% narrower than normal.
Open High Low Close Volume___
0.710 0.711 0.706 0.709 104,233
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.72 0.72 0.73
Volatility: 14 11 11
Volume: 102,537 108,152 108,192
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 2.7% 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 20 periods.
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