Tag: AUDUSD

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Aussie retraces as ASX 200 strengthens

RBA concern over the rising Australian Dollar is increasing, but whether this will motivate governor Glenn Stevens to do more than attempt to talk the market lower remains to be seen. The Aussie retraced to test its new support level, but only a fall below $0.92 would suggest a trend change. Recovery above $0.94 would suggest not, while follow-through above $0.95 would confirm a target of $0.97.

AUDUSD

The ASX 200 broke clear of its descending trendline, suggesting that the correction is over. But 21-day Twiggs Money Flow remains weak and follow-through above 5540/5560 unlikely. Further ranging between 5400 and 5550 seems likely. Reversal below 5380 is now unlikely, but would warn of a test of 5300.

ASX 200

* Target calculation: 5550 + ( 5550 – 5400 ) = 5700

ASX 200 VIX again tracked lower, indicating a bull market.

ASX 200

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ASX 200 weakens but Aussie dollar strengthens

  • Aussie dollar strengthens.
  • Stocks weaken.
  • But ASX 200 VIX continues to indicate a bull market.

The Aussie Dollar is testing resistance at $0.94. Consolidation in a narrow band suggests continuation of the rally towards $0.97/$0.98. Recovery of 13-week Twiggs Momentum above zero suggests a primary up-trend, but we may see the RBA intervene to prevent this. They may need to follow the RBNZ, introducing macro-prudential controls (e.g. setting a maximum 80% LVR percentage), to take the steam out of the housing market while lowering interest rates to weaken the currency.

Aussie Dollar

The ASX 200 respected resistance at 5500 and is headed for a test of medium-term support at 5400. Reversal of 21-day Twiggs Money Flow below zero warns of medium-term selling pressure and a correction. Breach of 5400 is likely and would test support at 5300 and the rising trendline. Respect of 5400 is unlikely, but would suggest another rally to 5550.

ASX 200

* Target calculation: 5550 + ( 5550 – 5400 ) = 5700

ASX 200 VIX below 12, however, continues to indicate low risk typical of a bull market.

ASX 200

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Aussie strong despite ASX

The ASX 200 broke its rising trendline and short-term support to signal a correction. Declining 21-day Twiggs Money Flow indicates short-term selling pressure (a trough that respects zero would be a bullish sign). Breach of 5290/5300 would warn of a test of primary support at 5050. Failure of primary support is unlikely, but would signal a down-trend. Recovery above 5460 is also unlikely at present, but would signal a fresh advance.

ASX 200

* Target calculation: 5450 + ( 5450 – 5300 ) = 5600

ASX 200 VIX is rising, but continues to indicate low risk typical of a bull market.

ASX 200

The Aussie Dollar remains strong, consolidating at $0.94 despite ASX weakness. Bullish divergence on 13-week Twiggs Momentum signals a primary up-trend, but we may see the RBA intervene to prevent this. The RBA may need to follow the RBNZ, with macro-prudential controls, to take the steam out of the housing market (setting a maximum LVR percentage, for example) if further rate cuts become necessary.

Aussie Dollar

* Target calculation: 0.93 + ( 0.93 – 0.91 ) = 0.95

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Who is buying Australian stocks?

Despite a broad sell-off across global markets, the ASX 200 has stood firm, rallying into the close for the last two days. Low volumes indicate an absence of sellers, but expect strong resistance at 5450/5460. Breach of the rising trendline would warn of another test of support at 5300 and possibly a stronger correction. Breakout above 5450/5460 remains as likely and would signal an advance to 5600*. Primary support at 5050 does not at this stage appear threatened and the index remains in an up-trend.

ASX 200

* Target calculation: 5450 + ( 5450 – 5300 ) = 5600

A rising Aussie Dollar may be contributing to ASX resilience. Performance over the last quarter looks a lot stronger if measured in US Dollars or Japanese Yen. Breakout of the Aussie Dollar above $0.93 suggests a rally to $0.95*.

Aussie Dollar

* Target calculation: 0.93 + ( 0.93 – 0.91 ) = 0.95

The weekly chart presents a more complete picture. Breach of the descending trendline and recovery of 13-week Twiggs Momentum above zero (after a strong bullish divergence) both suggest that a bottom is forming, but we are a long way from commencing an up-trend.

Aussie Dollar

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Aussie Dollar resilient despite ASX correction

China is dragging the ASX lower despite a resilient US market. Breach of medium-term support at 5340 warns of a correction. Declining 21-day Twiggs Money Flow indicates selling pressure and reversal below zero would strengthen the signal. The primary trend remains upward, however, and only breach of support at 5050 would signal a reversal.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

ASX 200 VIX retreated to 13, indicating low risk typical of a bull market.

ASX 200

The Aussie Dollar is also proving resilient, testing resistance at $0.91 and the descending trendline despite weakness on the ASX. Upward breakout would suggest the down-trend is weakening. Recovery of 13-week Twiggs Momentum above zero would go further, signaling a primary up-trend, though only breakout above $0.97 would confirm. Reversal below medium-term support at $0.89 remains more likely, however, and would warn of another decline. Breach of primary support at $0.87 would offer a target of $0.83*.

Aussie Dollar

* Target calculation: 0.87 – ( 0.91 – 0.87 ) = 0.83

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ASX and Aussie Dollar retreat

The Aussie Dollar retreated from resistance at $0.91 and is likely to test medium-term support at $0.89. Breach of support would test the primary level at $0.87, while respect would favor another attempt at $0.91. The primary trend is down and failure of primary support would offer a target of $0.83*.

Aussie Dollar

* Target calculation: 0.87 – ( 0.91 – 0.87 ) = 0.83

The ASX 200 followed the Aussie lower, retreating below 5450 on the daily chart. Retreat of 21-day Twiggs Money Flow below zero would complete a bearish divergence, warning of a correction. Failure of support at 5350 would confirm. The primary trend remains upward and only breach of support at 5050 would signal a reversal.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

ASX 200 VIX below 15 continues to indicate low risk typical of a bull market.

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ASX 200 stalls as Aussie Dollar retreats

The Aussie Dollar retreated from resistance at $0.91. Breakout below primary support at $0.885 against the greenback would warn of a primary decline, with a long-term target of $0.81*. Follow-through below $0.865 would confirm. Recent Twiggs Momentum peaks below zero also indicate a primary down-trend. Respect of primary support and recovery above $0.91 is unlikely, but would suggest that a bottom is forming.

Aussie Dollar

* Target calculation: 0.89 – ( 0.97 – 0.89 ) = 0.81

The ASX 200 is consolidating below resistance at 5450, waiting for a lead from US markets. Bearish divergence on 13-week Twiggs Money Flow suggests long-term selling pressure, but completion of a large trough above zero (TMF recovery above 30%) would change this. Breakout above 5450 would signal an advance to 5800*. Reversal below 5400, however, would warn of another correction.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

ASX 200 VIX below 15 indicates low risk typical of a bull market.

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Aussie dive hurts ASX

The Australian Dollar is declining after breaking primary support at $0.885, offering a long-term target of 80 cents*. Exporters and import replacement industries on the ASX will benefit from the weaker Aussie Dollar in the long-term, but the short-term impact is negative, with overseas investors retreating from the market.

Australian Dollar/USD

* Target calculation: 0.885 – ( 0.97 – 0.885 ) = 0.80

The ASX 200 is heading for a test of support at 5200. Breach is likely and would signal a test of primary support at 5000. Declining 13-week Twiggs Money Flow indicates selling pressure. Recovery above 5400 is unlikely in the short-term, but would signal a primary advance, with a long-term target of 5800*.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

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Australia: ASX 200

A monthly chart of the ASX 200 shows how the index tends to peak ahead of the CRB Commodities Index and Australian Dollar but then fall in step with them from there on. The ASX 200 was first to reverse direction in 2011 but commodities now lead the way. Expect Australian stocks — and the Aussie Dollar — to follow commodities lower. Breach of primary support at 3850 would offer a target of 3200*.

ASX 200, CRB Commodities Index, AUDUSD - Monthly Chart

* Target calculation: 3800 – ( 4400 – 3800 ) = 3200

On the daily chart, breach of support at 3980/4000 would signal a test of primary support at 3850. Reversal of 21-day Twiggs Money Flow below zero, warning of medium-term selling pressure, increases the likelihood of a downward breakout.

ASX 200 Index

* Target calculation: 4000 – ( 4150 – 4000 ) = 3850

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Aussie Dollar, Canadian Loonie and commodities

The CRB Commodities Index retreated from resistance at 325. Failure of medium-term support at 310 would signal a test of primary support at 295. Respect of the zero line (from below) by 63-day Twiggs Momentum indicates continuation of the primary down-trend.

CRB Commodities Index

Lower commodity prices weakened the Aussie Dollar, with a fall below $1.06 warning of a correction to the long-term (green) rising trendline. 63-Day Twiggs Momentum remains strong, however, and recovery above $1.08 would confirm a primary up-trend.

Aussie Dollar

Canada’s Loonie was helped by rising crude prices and recovery above $1.01 would confirm the primary advance to $1.06*.

Canadian Loonie

* Target calculation: 1.01 + ( 1.01 – 0.96 ) = 1.06

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