AUD Technical Analysis

2016-09-22 00:00 GMT | [AUD - RBA Gov Lowe Speaks]

• past data is n/a
• forecast data is n/a
• actual data is n/a according to the latest press release

[AUD - RBA Gov Lowe Speaks] = Opening Statement to the House of Representatives Standing Committee on Economics, in Canberra
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From SBS article: RBA governor Philip Lowe says a lower Australian dollar would be helpful to amplify the positive effects of its falls in recent years

A lower Australian dollar would be helpful in amplifying the economic benefits of its recent falls, Philip Lowe has said at his first appearance as Reserve Bank governor.
"Of course most central banks say the same thing - most people would like a slightly lower exchange rate and I think it reflects the deficiency in aggregate demand in the global economy," Mr Lowe told a hearing of the House of Representatives economic committee in Sydney.

"Many of my peers think the same, but of course we can't all have a lower exchange rate," he said.

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AUD/USD M5: 28 pips range price movement by RBA Gov Lowe Speaks news event

The Australian Dollarhas broken through the floor of the rising trend guiding prices higher since the beginning of the year, hinting that the long-term down trend is resuming. The breakdown occurred against a backdrop of negative RSI divergence, bolstering the case for a topping scenario.

Initial support is in the 0.7463-98 area (horizontal pivot, 23.6% Fibonacci expansion), with a break below that on a daily closing basis opening the door for a test of the 38.2% level at 0.7373. Alternatively, a reversal above the January 24 high at 0.7609 sees the next major upside barrier at 0.7760, a double top.

Prices are too close to near-term support to justify entering short from a risk/reward perspective. With that in mind, an entry order to sell the pair at 0.7572 has been established. If activated the trade will initially target 0.7498 and carry a stop-loss activated on a daily close above 0.7609.

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The Australian Dollar vaulted to a three-month high after a languishing in a choppy range the against its US counterpartfor nearly two weeks. Negative RSI divergence warns of ebbing upside momentum and hints a turn downward may be brewing ahead.

A daily close below the 14.6% Fibonacci expansion at 0.7685 opens the door for a retest of the February 7 low at 0.7606. Alternatively, a push above the 0.7733-60 area (23.6% Fib, double top) sees the next upside barrier at 0.7811, the 38.2% expansion.

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CURRENCY	TIME	SELL FROM	STOP LOSS	TAKE PROFIT	TAKE PROFIT2	TRADE STATUS	HIT TAKE PROFIT
AUDUSD	2 hours ago	0.7708	0.7759	0.7675	0.7642	RUNNING

AUD/JPY may face range-bound conditions going in Japan’s 2016 fiscal year-end as it struggles to break the monthly opening range, but the broader outlook remains constructive as the pair preserves the bullish formations carried over from earlier this year.

The lack of momentum to test the 87.70 (61.8% expansion) hurdle may keep AUD/JPY within a narrow range especially as the Relative Strength Index (RSI) preserves the downward trend carried over from December. However, the aussie-yen exchange rate appears to be on the cusp of a larger move as the 50-Day SMA (86.42) continues to offer support, with price & the RSI approaching the approaching the apex of a near-term wedge/triangle formation.

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The Australian Dollarput in a Bearish Engulfing candlestick pattern, hinting prices may have topped below 0.78 figure against the US Dollar once again. A reversal lower would mark the second time that prices failed to overcome resistance dating back to in August 2016.

Near-term support is at 0.7659, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a test of the 23.6% level at 0.7604. Alternatively, a push above double top resistance at 0.7760 paves the way for a test of the April 2016 high at 0.7835.

Prices are too close to near-term support to justify entering a short trade from a risk/reward perspective. Either a bounce or a confirmed breach of near-term support is needed to pave the way for an actionable entry opportunity. In the meantime, opting for the sidelines seems most prudent.

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The AUD/USD is rebounding from fresh daily lows, as US Dollar pairs are now processing the release of the FOMC meeting minutes from March 15th. This event has been marked as a high importance release on the economic calendar, with traders searching for clues inside of last month’s minutes to help determine potential shifts in policy from the FED.

Technically the AUD/USD remains in a long term uptrend, with the pair remaining supported by its 200 day MVA (simple moving average) at .7552. If this uptrend is set to continue, traders will look for the pair to next breakout above its short term 10 day EMA (exponential moving average). This line is found at .7614, and a breakout above this EMA would suggest a bullish shift in the markets short term trend. If the AUD/USD fails to breakout higher in the short term, traders may watch for a bearish shift in the market below the previously mentioned 200 day MVA. A breakout below this line should be seen as significant. In this bearish scenario, traders may begin to target the standing March 2017 low found at .7505.

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Daily price is located above 200 SMA in the bullish area of the chart.

The price is on ranging correction within the primary bullish market condition with 0.7473 bearish reversal support level.

The price is above 200-day SMA in the bullish area of the chart.

The secondary correction was started in 21st of March 2017 by bouncing from 1.03 resistance level to below to the bearish reversal support level at 1.00.

The Australian Dollar may be poised to continue higher after breaking the top of a falling channel that had contained gains against its US counterpart for two months. It remains to be seen whether the move will amount to a correction or if prices are laying the foundation for a longer-term advance.

Near-term resistance is now at 0.7554, the 38.2% Fibonacci expansion, with a daily close above opening the door for a test of the 0.7609-24 area (chart inflection point, 50% level). Alternatively, a reversal back below 0.7461 (channel top resistance-turned-support) targets the 14.6% Fib at 0.7415.

A short AUD/USD trade activated at 0.7423 was stopped out. Getting long looks compelling but the risk/reward setup is skewed against the trade. An order has been set up to enter long at 0.7461. If triggered, the initial target will be 0.7554 with a stop-loss activated on a daily close below 0.7415.

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