USDAUD closes above its opening price after recovering from early selling pressure
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDAUD finished the week -0.6% lower at 1.4894 after gaining 11 pips (0.07%) today on low volume. Trading up to 28 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on February 6th, USDAUD gained 0.85% on the following trading day. 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 Feb 14, 2020):
Friday's trading range has been 48 pips (0.32%), that's far below the last trading month's daily average range of 96 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 1.4815 and 1.4910 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. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
The market ran into sellers again today around 1.4905 for the third trading day in a row after having found sellers at 1.4910 in the prior session and at 1.4899 two days ago.
Although the currency is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 1.4910 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 1.4815 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/AUD. Out of 397 times, USDAUD closed lower 52.90% of the time on the next trading day after the market condition occurred.