Australian Dollar: USD/AUD (AUD=X) to Continue Going Higher

Australian Dollar: USD/AUD (AUD=X) to Continue Going Higher

Australian Dollar: USD/AUD (AUD=X) to Continue Going Higher

The Australian dollar has rallied a bit during the trading session on Tuesday but gave back quite a bit of the gains due to Donald Trump suggesting that the trade deal might be better served happening after the election. If that’s going to be the case, that has a lot of people concerned as there will be more tariffs levied on consumer goods coming into the United States and China. Granted, this is a bit of an overreaction as we have seen the stock markets get hammered, but ultimately this is a market that is far too highly levered to the Chinese situation to think that we are going to get an easy path higher.

That being said, even if we do pullback from here it looks as if we are most certainly trying to break to the upside. The Australian dollar has been beaten down significantly on a longer-term standpoint and it’s likely that we will continue to see buyers underneath trying to take advantage of this. I like the idea of buying this pair, but I also recognize that there’s no need to jump into it right away. Even if you were to wait a break above the 200 day EMA, I suspect that this might be a multi-year trade, so quite frankly 70 pips here or there doesn’t really matter.

It’s also worth noting that the 0.67 level underneath has offered a lot of support, and the most recent pullback has been a little bit shallower, forming a “higher low”, which of course is the very epitome of a potential trend change. If we do get that trend change, this is a market that is very likely to go to the upside and reach towards the 0.70 level, and then eventually the 0.71 level after that. With this, I think that if you are patient enough you can start to build up a larger core position, but it is going to take quite a bit of patience to make this thing turnaround from a longer-term standpoint. Once it does though, this could be a nice trade, or perhaps even something more along the lines of an investment as it could be held onto that long. With this, I am optimistic, but not quite yet bullish. Those are two different things, and that should be kept in the back of your mind.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 0.69.

The projected lower bound is: 0.68.

The projected closing price is: 0.69.

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 24 white candles and 26 black candles for a net of 2 black candles.

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.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 87.8376. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 6 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 57.42. 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 84 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 148.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 2 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed up 0.000 at 0.685. Volume was 20% below average (neutral) and Bollinger Bands were 31% narrower than normal.

Open     High      Low     Close     Volume___
0.685 0.686 0.681 0.685 48,881
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 7
Volume: 44,002 51,646 74,391

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 1.0% below its 200-period moving average and is in an downward trend. Volatility is 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 10 periods.

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