USDAUD closes lower for the 2nd day in a row
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Apr 07, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDAUD finished Tuesday at 1.6210 losing 218 pips (-1.33%) on low volume. Closing below Monday's low at 1.6377, the currency confirmed its breakout through the previous session low after trading up to 269 pips below it intraday.
Daily Candlestick Chart (USDAUD as at Apr 07, 2020):
Tuesday's trading range has been 350 pips (2.13%), that's below the last trading month's daily average range of 517 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDAUD.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 1.6108 earlier during the day, the market bounced off the key technical support level at 1.6129 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on March 31st, USDAUD gained 1.04% on the following trading day.
Though the forex pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 1.6093 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for USD/AUD. Out of 292 times, USDAUD closed higher 53.77% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 53.42% with an average market move of 0.39%.