Australian Dollar: USD/AUD (AUD=X) Target 0.7000
The Australian Dollar suffered a horror week, falling in late-week trade to around 0.7176, to register lows not witnessed since January 2017. The local unit has faced an uphill battle recently, as interest rate traders progressively reduce bets of an interest rate hike from the RBA any time before March 2020. This view was reaffirmed by the domestic economy’s most significant economic release last week, Private Capital Expenditure data, which revealed private investment contracted by 2.5 per cent last quarter.
It was new developments in the trade war late on Friday evening (AEST) that really sunk the currency however, after it was reported that NAFTA related negotiations between the US and Canada had disintegrated. Not to say it was North American trade dynamics that caused the weakness in the AUD, but more what they represent for future negotiations between the US and its stand-off in China. As markets now prepare for the go ahead of the next round of US tariffs on China, declines in the AUD/USD towards 0.7000 look increasingly possible.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 0.74.
The projected upper bound is: 0.73.
The projected lower bound is: 0.70.
The projected closing price is: 0.72.
A white body occurred (because prices closed higher 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 27 white candles and 23 black candles for a net of 4 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.
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 16.8783. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 9 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 36.95. 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 85 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 -134.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 13 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 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.000 at 0.718. Volume was 99% below average (consolidating) and Bollinger Bands were 5% wider than normal.
Open High Low Close Volume___
0.718 0.718 0.717 0.718 542
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.73 0.74 0.76
Volatility: 13 11 10
Volume: 95,366 102,261 96,594
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 5.8% below its 200-period moving average and is in an downward 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 bearish on AUD= and have had this outlook for the last 17 periods.
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