CBA eyes Australian Dollar: USD/AUD (AUD=X) consolidation above key level this week
The Australian Dollar was on the defensive at the beginning of the new week but is tipped by analysts at Commonwealth Bank of Australia (CBA) to prevail in its ongoing scrap for a key level over the coming days.
Australia’s Dollar ceded ground to a resurgent U.S. greenback Monday, while keeping a lid on a beleaguered Pound Sterling, but it’s expected to reclaim and consolidate above the 0.70 handle in the latter part of the week. That threshold has been described by Societe Generale as a “line in the sand” for the Aussie.
The Aussie retreated further during the overnight session and into Tuesday after the National Australia Bank (NAB) business confidence index was shown falling during the month of June, with the bank saying that all industries have lost momentum in recent months.
“USD will remain well supported in the early pa rt of this week because of Friday’s US employment report in our view. However, we expect the USD to ease as the week progresses,” says Joseph Capurso, a strategist at Commonwealth Bank of Australia. “AUD/USD will consolidate above 0.7000 this week if the USD weakens as we expect. Commodity prices are very supportive for AUD/USD, particularly iron ore prices.”
Overall, the bias in prices is: Sideways.
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 22 white candles and 27 black candles for a net of 5 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 14.7911. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 44.70. 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 36 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 -76. This is not a topping or bottoming area. The last signal was a sell 2 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 sell 0 period(s) ago.
Rex Takasugi – TD Profile
FOREX AUD= closed down -0.004 at 0.693. Volume was 66% below average (consolidating) and Bollinger Bands were 18% wider than normal.
Open High Low Close Volume___
0.697 0.697 0.693 0.693 30,403
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.70 0.69 0.71
Volatility: 9 7 9
Volume: 69,516 85,216 102,222
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 2.3% below its 200-period moving average and is in an upward 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 bullish on AUD= and have had this outlook for the last 11 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.
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