Australian Dollar: USD/AUD (AUD=X) tone changed from short-term bullish to short-term bearish
The tone changed from short-term bullish to short-term bearish last week when U.S. Treasury yields started to rise. This helped make the U.S. Dollar a more attractive investment. Yields are being boosted by increased demand for risky assets tied to the optimism over the positive developments in the trade talks between the United States and China.
Fueling the strength in Treasury yields was a report from CNBC that China had offered a six-year increase in U.S. imports during recent trade talks. Bloomberg News also reported on Friday that the deal would aim to reduce the annual U.S. trade deficit to zero by 2024.
On Thursday, it was reported that Treasury Secretary Steven Mnuchin was considering the idea of easing tariffs on Chinese goods as a means of moving along the negotiations for a new trade deal. The reaction to this news was cautious, however, because the report was refuted by a senior administration official who told CNBC that there is “no discussion of lifting tariffs now.”
In New Zealand, prospects for a flat fourth-quarter CPI figure this week, and the risks that Reserve Bank changes to bank capital requirements may slow growth are weighing on the Kiwi.
In Australia, investors will get the opportunity to react to the Employment Change and the Unemployment Rate.
After an initial reaction to the reports from New Zealand and Australia, traders are going to focus on U.S. Treasury yields. Look for the Aussie and Kiwi to continue to weaken if yields rise in anticipation of more positive developments in U.S.-China trade relations. Weak domestic data will also weigh on the currencies.
Overall, the bias in prices is: Sideways.
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 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 23 black candles for a net of 3 white candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
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 35.9683. This is not an overbought or oversold reading. The last signal was a sell 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 52.19. 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 20 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 36. This is not a topping or bottoming area. The last signal was a sell 4 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 buy 11 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.000 at 0.716. Volume was 90% below average (consolidating) and Bollinger Bands were 13% wider than normal.
Open High Low Close Volume___
0.716 0.719 0.716 0.716 11,052
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.72 0.72 0.73
Volatility: 6 10 10
Volume: 99,756 112,184 107,133
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 2.0% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 6 periods.