USDAUD closes within previous day's range after lackluster session
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Mar 15, 2019 | by Techniquant Editorial Team
USDAUD ended the week -0.56% lower at 1.4114 after losing 42 pips (-0.3%) today. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (USDAUD as at Mar 15, 2019):
Friday's trading range has been 70 pips (0.49%), that's below the last trading month's daily average range of 111 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDAUD. Prices continued to consolidate within a tight trading range between 1.4088 and 1.4201 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, the market closed lower but above the previous day's open today, forming a bearish Harami Candle. The last time this candlestick pattern showed up on January 23rd, USDAUD actually gained 0.67% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices broke below the key technical support level at 1.4128 (now R1), which is likely to act as resistance going forward. The currency was bought again around 1.4090 after having seen lows at 1.4088, 1.4088 and 1.4100 in the last three trading sessions. Obviously there is something going on at that level.
USD/AUD shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the close-by swing high at 1.4201 where further buy stops might get triggered. As prices are trading close to March's low at 1.4041, downside momentum could accelerate should the FX pair mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for USD/AUD. Out of 25 times, USDAUD closed lower 68.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 64.00% with an average market move of 0.00%.