Australian Dollar: USD/AUD (AUD=X) Underpinned by Robust Chinese Economic Data
The Australian and New Zealand Dollars are trading higher on Monday as investors react to stronger-than-expected economic data from China, while continuing to digest the trade deal between the United States and China that was announced on Friday. There is some uncertainty over the details of the trade agreement which may be limiting gains. Furthermore, traders are exhibiting caution ahead of key domestic reports later this week.
China’s Factory, Retail Sectors Exceed Expectations
Growth in China’s industrial and retail sectors beat expectations in November, as government support propped up demand in the world’s second-largest economy and amid easing trade hostilities with Washington.
Industrial Production rose 6.2% year-on-year in November, data from the National Bureau of Statistics showed, beating the median forecast of 5.0% growth in a Reuters poll and quickening from 4.7% in October. It was also the fastest year-on-year growth in five months.
Retail sales rose 8.0% year-on-year in November, compared with an expected 7.6%, buoyed by stimulus measures and the November Singles Day shopping extravaganza, the statistics bureau said.
Fixed Asset Investment showed few signs of improvement, growing 5.2% from January-November, in line with the increase seen in the first 10 months, which was the weakest in decades.
Infrastructure investment growth, a key driver of activity, slowed to 4.0% in January-November in the first 10 months.
Traders Having Issues with Trade Deal
U.S. and Chinese officials announced on Friday that the two economic powerhouses had reached a phase one agreement after a combative 18-month trade war. The details are a little sketchy, but it looks as if China agreed to billions of dollars in agricultural purchases from the U.S., while U.S. President Trump vowed to not pursue a new round of tariffs that had been scheduled for Sunday. The two major economies plan to sign the partial accord in the first week of January.
U.S. Trade Representative Robert Lighthizer said on Sunday that the phase one U.S.-China trade deal reached on Friday is “totally done,” and it will nearly double U.S. exports to China over the next two years.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 0.68.
The projected upper bound is: 0.70.
The projected lower bound is: 0.68.
The projected closing price is: 0.69.
A black body occurred (because prices closed lower 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 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 69.8494. This is not an overbought or oversold reading. The last signal was a sell 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 59.28. 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. (ERROR: Function did not return a value)
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 105.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed up 0.001 at 0.689. Volume was 33% below average (neutral) and Bollinger Bands were 10% narrower than normal.
Open High Low Close Volume___
0.689 0.690 0.687 0.689 39,357
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.69 0.68 0.69
Volatility: 8 7 7
Volume: 47,652 49,350 72,202
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 0.3% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on AUD= and have had this outlook for the last 1 periods.