Australian Dollar: USD/AUD (AUD=X) Weakens Under .6604, Strengthens Over .6644

Australian Dollar: USD/AUD (AUD=X) Weakens Under .6604, Strengthens Over .6644

Australian Dollar: USD/AUD (AUD=X) Weakens Under .6604, Strengthens Over .6644

The Australian Dollar is trading flat to lower in limited action on Thursday as investors continue to assess the impact of the coronavirus on its economy, while digesting the Reserve Bank of Australia’s 25-basis point rate cut from Tuesday and an aggressive 50-basis point rate cut by the U.S. Federal Reserve later than day.

Earlier in the session, Australia’s Treasury Department said estimates show the coronavirus will detract at least half a percentage point off growth in the first quarter of 2020, but says it is too early to make a longer-term assessment of the impact of the virus.

Additionally, Australia’s January balance of goods and services came in slightly bullish. The trade balance came in at 5.21 billion A$ versus a forecast of 4.80 billion A$. This was down from the previously release which was reversed higher to 5.38 billion A$.

Australia’s January goods and services exports dropped 3 percent month-over-month on a seasonally adjusted basis and January imports fell 3 percent month-over-month on a seasonally adjusted basis.

The Australian Dollar showed limited reaction to the slightly stronger trade balance data.

Daily Technical Forecast

Based on the early price action and the current price at .6622, the direction of the AUD/USD the rest of the session on Thursday is likely to be determined by trader reaction to the short-term 50% level at .6604.

Bullish Scenario

A sustained move over .6604 will indicate the presence of buyers. The first upside target is the short-term Fibonacci level at .6644.

Overtaking .6644 will indicate the buying is getting stronger. This could lead to a test of the downtrending Gann angle at .6669. This is a potential trigger point for an acceleration to the upside with the next target angle coming in at .6722.

Bearish Scenario

A sustained move under .6604 will signal the presence of sellers. The first downside target is a pair of downtrending Gann angles at .6572 and .6564.

Crossing to the weak side of the downtrending angle at .6564 could trigger an acceleration to the downside.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 0.67.

The projected upper bound is: 0.67.

The projected lower bound is: 0.65.

The projected closing price is: 0.66.

Candlesticks

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 20 white candles and 28 black candles for a net of 8 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 79.3428. This is not an overbought or oversold reading. The last signal was a buy 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 41.38. 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 2 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 -4. 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 buy 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.003 at 0.660. Volume was 15% above average (neutral) and Bollinger Bands were 31% wider than normal.

Open     High      Low     Close     Volume___
0.663 0.664 0.658 0.660 58,621
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.66 0.68 0.68
Volatility: 11 8 8
Volume: 71,908 55,813 60,597

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 3.5% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 37 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.