Australian Dollar: USD/AUD (AUD=X) showing signs of weakness

Australian Dollar: USD/AUD (AUD=X) showing signs of weakness

Australian Dollar: USD/AUD (AUD=X) showing signs of weakness

The Australian dollar has gotten hammered during the trading session on Friday, showing signs of weakness yet again as money continues to flow out of Asia due to the coronavirus and simple slowdowns. The Australian economy is getting hammered from all fronts, considering that the wildfires continue to cause economic damage, and of course the lack of demand from China continues to be a major issue. The Chinese suffering at the hands of the coronavirus continues to slow the economy down, and therefore demand for Australian commodities will fall.

As the United States is the loan shining example of a strong economy in the G 10, it makes sense that demand for commodities will continue to get hammered. Looking at this chart, the shooting star from the Wednesday session makes quite a bit of sense as a selling point, and in hindsight was an excellent place to get short. There are a couple of shooting stars not only on Wednesday but also on Thursday, and that is a very strong sign that shows there is plenty of weakness. Having said that, if the market were to break above the top of the shooting star, then it could rally towards the 50 day EMA but quite frankly it would take a complete turnaround in the overall attitude. A break down from the bottom of the trading range on the Friday candlestick has this market going lower but I would also caution that we are approaching the top of the range that the market had been in during the financial crisis, meaning that this decline is getting long in the truth.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 0.68.

The projected upper bound is: 0.67.

The projected lower bound is: 0.66.

The projected closing price is: 0.67.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 26 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 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 23.8672. This is not an overbought or oversold reading. The last signal was a buy 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 27.05. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 4 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 -120.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 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 24 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.000 at 0.667. Volume was 96% below average (consolidating) and Bollinger Bands were 64% wider than normal.

Open     High      Low     Close     Volume___
0.668 0.668 0.666 0.667 1,907
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.67 0.69 0.69
Volatility: 8 8 7
Volume: 52,260 47,729 62,993

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 2.8% below its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 19 periods. Our momentum oscillator is currently indicating that AUD= is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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.

Latest posts by HEFFX Australia (see all)