Australian Dollar: USD/AUD (AUD=X) showing signs of exhaustion near the 0.70 handle

Australian Dollar: USD/AUD (AUD=X) showing signs of exhaustion near the 0.70 handle

Australian Dollar: USD/AUD (AUD=X) showing signs of exhaustion near the 0.70 handle

The Australian dollar pulled back just a bit during the trading session on Thursday, showing signs of exhaustion near the 0.70 handle as you would expect. This is a large, round, psychologically significant figure so there will be a lot of interest in this area. However, the market has broken above the 200 day EMA recently, and of course the major downtrend line. Furthermore, it looks as if the 50 day EMA is going to try to cross the 200 day EMA and form the so-called “golden cross.” This is when longer-term traders start to look at this as a bullish market. At this point, I’m looking for a pullback as an opportunity to pick up the Aussie “on the cheap.”

In a perfect world, I would get the opportunity to buy this near the 0.6950 level. In that area, I think that there should be plenty of support as there is also horizontal resistance that had been broken there. There are so many things working in favor of the Australian dollar in that area that I think it makes perfect sense to be a buyer and that vicinity. However, I recognize that we could continue going higher and simply break out to the upside. If we do make a fresh, new high, then it’s likely that the market is probably going to go looking towards the 0.7225 handle over the longer term. Remember that this pair is highly sensitive to the US/China trade talks, so keep in mind those headlines will come into play occasionally.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 0.69.

The projected upper bound is: 0.71.

The projected lower bound is: 0.69.

The projected closing price is: 0.70.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.

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.

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 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 66.9087. This is not an overbought or oversold reading. The last signal was a sell 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 66.85. 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 sell 1 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 74. This is not a topping or bottoming area. The last signal was a sell 1 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 23 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.000 at 0.699. Volume was 100% below average (consolidating) and Bollinger Bands were 41% wider than normal.

Open     High      Low     Close     Volume___
0.699 0.700 0.699 0.699 30
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 0.70 0.69 0.69
Volatility: 5 7 7
Volume: 32,237 44,023 67,662

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 1.4% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 15 periods.

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