USDAUD slips to lowest close since April 19, 2019
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Jul 22, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, USDAUD ended Wednesday at 1.4006 losing 23 pips (-0.16%) on high volume. Today's close at 1.4006 marks the lowest recorded closing price since April 19, 2019. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (USDAUD as at Jul 22, 2020):
Wednesday's trading range has been 139 pips (0.99%), that's slightly above the last trading month's daily average range of 123 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDAUD.
Two candlestick patterns are matching today's price action, the Takuri Line which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Takuri Line showed up on May 19th, USDAUD actually lost -0.91% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 1.4359.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
2019's low at 1.3708 is within reach and we could see further downside momentum should the FX pair break out beyond.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/AUD. Out of 33 times, USDAUD closed lower 69.70% 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 54.55% with an average market move of -0.23%.