Australian Dollar: USD/AUD (AUD=X) trade truce is probably temporary

Australian Dollar: USD/AUD (AUD=X) trade truce is probably temporary

Australian Dollar: USD/AUD (AUD=X) trade truce is probably temporary

Australia enjoyed a gain of 44K jobs in August, nearly triple the expectations. Another boost to the Aussie came from the trade war front. The US has not imposed new tariffs on China and negotiations have resumed. Do the talks have a fair chance? This is still to be seen, but at the moment, markets are up and the A$ rides the wave.

  1. CB Leading Index: Monday, 2:30. The Conference Board’s composite index is comprised of 7 separate indicators, some of them already published. The indicator advanced by 0.2% in June and will likely enjoy a similar increase in July.
  2. Monetary Policy Meeting Minutes: Tuesday, 1:30. The Reserve Bank of Australia left interest rates unchanged in its recent September meeting and did not adopt a dovish stance, contrary to the RBNZ. The meeting minutes will shed some light on the deliberations within the Canberra-based institution.
  3. HPI: Tuesday, 1:30. This official measure of house price fell by 0.7% in the first quarter of 2018. While house prices are volatile even on a quarterly basis, a second consecutive quarter of declines will be worrying. A drop of 0.7% is on the cards.
  4. MI Leading Index: Wednesday, 00:30. The Melbourne Institute uses no less than nine economic gauges for its composite measure. The gauge remained flat in July.
  5. Christopher Kent talks: Wednesday, 1:30. The RBA’s Assistant Governor delivers a speech in Sydney and about the creation of money. Any comments about the economy or changes in money creation will be of interest.
  6. RBA Bulletin: Thursday, 1:30. The quarterly report by the RBA is a long document including various statistics about the economy. The outlook for future developments is of interest.

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: 0.71.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

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 62.1429. This is not an overbought or oversold reading. The last signal was a buy 2 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 40.13. 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 92 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 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 sell 10 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.004 at 0.715. Volume was 13% below average (neutral) and Bollinger Bands were 52% wider than normal.

Open High Low Close Volume___
0.719 0.722 0.715 0.715 89,125

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 0.72 0.73 0.76
Volatility: 10 11 10
Volume: 93,532 102,378 97,503

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 6.0% 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 24 periods.

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