Australian Dollar: USD/AUD (AUD=X) very unlikely to be able to rally

Australian Dollar: USD/AUD (AUD=X) very unlikely to be able to rally

Australian Dollar: USD/AUD (AUD=X) very unlikely to be able to rally

The Australian dollar initially tried to rally during the trading session on Wednesday but struggled at the 0.67 handle. This level seems to be more or less a magnet for price, and it looks as if we are going to continue going lower eventually. However, there is the area just below that extends down to the 0.63 handle, which was the consolidation area during the financial crisis, so that shows just how low we are. Coronavirus continues to be a major issue for the Chinese, thereby taking Australia’s biggest customer out of the equation.

All that being said, the market shows a significant amount of resistance at the 0.6775 handle, so if we were to turn around a break above there it would be very bullish sign. At that point, I would anticipate that the market may go looking towards the 0.70 level above. All things being equal, it’s very likely that the market is sold into on short-term rallies that show signs of exhaustion. The US dollar of course is favored over the Aussie dollar in this current environment, so a continuation to the downtrend makes quite a bit of sense. Until the situation in China stabilizes, it’s very unlikely that the Australian dollar can rally for a significant amount of time so therefore it should continue to be weak. Having said that, I do believe that paying attention to the longer-term chart makes quite a bit of sense because we could be trying to form a basing pattern in this area.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 0.68.

The projected lower bound is: 0.66.

The projected closing price is: 0.67.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 26 black candles for a net of 5 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 26.2929. This is not an overbought or oversold reading. The last signal was a buy 11 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 33.55. 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 7 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 -107.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. 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 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.001 at 0.668. Volume was 11% below average (neutral) and Bollinger Bands were 9% narrower than normal.

Open     High      Low     Close     Volume___
0.669 0.671 0.666 0.668 43,340
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.67 0.68 0.69
Volatility: 7 7 7
Volume: 49,173 49,018 61,467

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 2.6% 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 26 periods.

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