Australian Dollar: USD/AUD (AUD=X) tumble amid risk aversion

Australian Dollar: USD/AUD (AUD=X) tumble amid risk aversion

Australian Dollar: USD/AUD (AUD=X) tumble amid risk aversion

Risk aversion is kicking in at the onset of Thursday’s Asia Pacific trading session. The sentiment-linked Australian and New Zealand Dollars are falling alongside S&P 500 and Nikkei 225 futures. Meanwhile, the anti-risk Japanese Yen and similarly-behaving Swiss Franc are outperforming against their major counterparts. The souring in market mood can be traced to developments in US-China trade talks.

Reports crossed the wires from the South China Morning Post that the United States and China “made no progress” in deputy-level trade talks. In addition, China’s delegation team (currently in the US ahead of key negotiations at the end of this week) is now set to leave a day earlier than anticipated. This has increased fears that the world’s largest economies may start raising more tariffs against each other relatively soon.

Global growth has largely been weighed down by trade wars as highlighted by world institutions such as the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD). This is while US manufacturing activity has contracted by the most in over 10 years as China’s economy slowed to its weakest in over 30 years.

THURSDAY’S ASIA PACIFIC TRADING SESSION

As such, further trade retaliation should trade talks collapse this week may continue weighing on general market mood. At the time of this writing, S&P 500 futures have wiped out the 0.91 percent gain from Wednesday’s trading session as the index looks to close under key rising support from the end of last year. With that in mind, the AUD, NZD are looking increasingly vulnerable as JPY could stand to keep gaining.

AUSTRALIAN DOLLAR TECHNICAL ANALYSIS

Losses in AUD/USD have overturned the Morning Star bullish reversal pattern highlighted earlier this week. Instead, the Aussie is now looking to retest the critical support range between 0.6678 and 0.6717. That is currently standing in-between it and extending the dominant downtrend that has been prevailing since January 2018. In the event of a turn higher, keep an eye on what could be potential falling resistance from July.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 0.68.

The projected upper bound is: 0.68.

The projected lower bound is: 0.67.

The projected closing price is: 0.68.

Candlesticks

During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 23 white candles and 25 black candles for a net of 2 black 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 62.5000. This is not an overbought or oversold reading. The last signal was a buy 12 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 48.32. 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 46 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 55. This is not a topping or bottoming area. The last signal was a buy 6 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 down -0.000 at 0.676. Volume was 98% below average (consolidating) and Bollinger Bands were 14% narrower than normal.

Open     High      Low     Close     Volume___
0.676 0.676 0.676 0.676 1,541
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.67 0.68 0.70
Volatility: 8 7 8
Volume: 53,362 68,961 84,943

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 3.1% below its 200-period moving average and is in an downward trend. Volatility is Our volume indicators reflect moderate flows of volume out of AUD= (mildly bearish). Our trend forecasting oscillators are currently bearish on AUD= and have had this outlook for the last 9 periods.

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