Australian Dollar: USD/AUD (AUD=X) risk appetite is improving

Australian Dollar: USD/AUD (AUD=X) risk appetite is improving

Australian Dollar: USD/AUD (AUD=X) risk appetite is improving

The Australian Dollar is primed for a recovery against the US Dollar over coming months.

Global risk appetite is improving. Our Global Risk Indicator appears to be moving back into positive territory for now after getting mired in the negative since early February – and within the G10, AUD is the classic proxy for risk appetite.

The Aussie has always been sensitive to commodities given exports from down under are predominantly comprised of industrial metals, energy and other raw materials. Prices of these goods, and therefore the Aussie, are heavily influenced by the ebb and flow of expectations for the global economy.

And given its position as the world’s largest consumer of raw materials, prices are particularly sensitive to economic developments in China, which has been under the cosh of late given President Donald Trump’s “trade war”.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 0.75.

The projected lower bound is: 0.72.

The projected closing price is: 0.74.

Candlesticks

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 24 black candles for a net of 2 white candles.

A bullish harami occurred (where the current small white body is contained within an unusually large black body). During a downtrend (which appears to be the case with FOREX AUD=) this pattern implies an end to the decline as the bears appear to have exhausted themselves.

During an uptrend the bullish harami pattern is bearish as the bears appear to be gaining strength as the bulls weaken.

An on-neck line occurred. This is a bearish pattern where prices should move lower when the white candlestick’s (i.e., the most recent) low is penetrated.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 40.9092. This is not an overbought or oversold reading. The last signal was a sell 22 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 46.07. 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 67 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 -130.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 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 27 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.001 at 0.738. Volume was 95% below average (consolidating) and Bollinger Bands were 56% narrower than normal.

Open High Low Close Volume___
0.737 0.738 0.737 0.738 5,152

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

Moving Averages: 10-period 50-period 200-period
Close: 0.74 0.74 0.76
Volatility: 8 10 9
Volume: 84,616 99,001 93,499

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 3.6% 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 10 periods.

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