Australian Dollar: USD/AUD (AUD=X) Support Cluster at .6894 to .6892
The Australian Dollar surged to the upside on Friday and finished the session higher in the wake of a weaker-than-expected U.S. jobs report. Optimism over the impact of the U.S.-China trade deal may have also played a role in encouraging short-sellers to book profits after a steep five-day sell-off. The two economic powerhouses are expected to sign the deal on January 15.
Despite the higher close and the possibility of a follow-through rally on Monday, traders expect gains to be limited. The bush fires are wreaking havoc on the Australian economy, leading some to predict the central bank will be forced to cut interest rates sooner than previously expected.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a move through .6838. A trade through .7032 will signal a resumption of the uptrend.
The main range is .7082 to .6671. The AUD/USD is currently trading inside its retracement zone at .6876 to .6925. This zone is controlling the long-term direction of the Forex pair.
The short-term range is .7032 to .6849. Its retracement zone at .6941 to .6962 is a potential upside target.
Another short-term range is .6754 to .7032. Its 50% level is .6893.
Daily Gann Angle Technical Analysis
On Friday, the AUD/USD settled on the strong side of a pair of Gann angles at .6892 and .6894.
If the rally continues then the next upside target is the downtrending Gann angle at .6962.
If the selling pressure is strong enough to take out .6849 then look for the selling to possibly extend into a pair of uptrending Gann angles at .6846 and .6824.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 0.70.
The projected lower bound is: 0.68.
The projected closing price is: 0.69.
A white body occurred (because prices closed higher 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 23 white candles and 26 black candles for a net of 3 black candles.
A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with FOREX AUD=) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.
A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with FOREX AUD=) it is called a bullish hammer.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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 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 32.8692. 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 49.22. 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 7 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 -67. This is not a topping or bottoming area. The last signal was a buy 1 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 4 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.000 at 0.690. Volume was 97% below average (consolidating) and Bollinger Bands were 16% wider than normal.
Open High Low Close Volume___
0.690 0.690 0.688 0.690 1,385
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 0.69 0.69 0.69
Volatility: 8 7 8
Volume: 44,040 44,958 66,458
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 0.1% above 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 21 periods.