Australian Dollar: USD/AUD (AUD=X) short-covering rally may run out of steam as price action will reach its next short-term resistance zone

Australian Dollar: USD/AUD (AUD=X) short-covering rally may run out of steam as price action will reach its next short-term resistance zone

Australian Dollar: USD/AUD (AUD=X) short-covering rally may run out of steam as price action will reach its next short-term resistance zone

Australian consumer confidence decreased ahead of the key holiday shopping season, but a phone call between officials from the US and China has once again grabbed the headlines. According to the Chinese Ministry of Commerce, progress has been made to sign a phase one trade truce, which a growing minority of market participants branded hollow and meaningless. The AUD/USD stabilized inside its support zone and bullish momentum started to increase. This currency pair is now ripe for a short-covering rally that should take price action back into its next short-term resistance zone.

The Force Index, a next-generation technical indicator, started to ascend after this currency pair reached its support zone and shows the build-up in bullish momentum as marked by the green rectangle. The steady increase in the Force Index is now expected to lead to a breakout above its descending resistance level and lead the AUD/USD into a breakout of its own. A breakout would move this technical indicator into positive conditions and place bulls in charge of price action. Momentum is likely to elevate the Force Index above its horizontal resistance level and convert it into support which will ignite the anticipated short-covering rally.

Another bullish development materialized after price action moved above its Fibonacci Retracement Fan trendline following a failed breakout attempt above its support zone; this zone is located between 0.67676 and 0.67918 as marked by the grey rectangle. Forex traders are advised to monitor the intra-day high of 0.67985 which represents the peak of the last time this currency pair attempted to advance out of its support zone. A move higher should clear the path for the AUD/USD to close the gap to its descending 38.2 Fibonacci Retracement Fan Resistance Level.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 0.69.

The projected lower bound is: 0.67.

The projected closing price is: 0.68.

Candlesticks

A white body occurred (because prices closed higher 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 23 white candles and 27 black candles for a net of 4 black candles.

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 21.9892. This is not an overbought or oversold reading. The last signal was a buy 0 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 43.00. 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 -87. This is not a topping or bottoming area. 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 sell 12 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.001 at 0.679. Volume was 29% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open     High      Low     Close     Volume___
0.678 0.679 0.677 0.679 43,512
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.68 0.68 0.69
Volatility: 6 7 8
Volume: 45,075 54,143 76,412

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 2.0% 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 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 4 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH