USDAUD closes lower for the 3rd day in a row
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Jul 28, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USDAUD finished Tuesday at 1.3970 losing 16 pips (-0.11%). Today's close at 1.3970 marks the lowest recorded closing price since April 17, 2019. Trading 69 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 24th, USDAUD lost -0.62% on the following trading day. Closing below Monday's low at 1.3986, the currency confirmed its breakout through the previous session low after trading up to 53 pips below it intraday.
Daily Candlestick Chart (USDAUD as at Jul 28, 2020):
Tuesday's trading range has been 126 pips (0.9%), that's slightly above the last trading month's daily average range of 125 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly 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 Bearish Spinning Top.
Prices are trading close to the key technical support level at 1.3922 (S1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 1.3922 where further sell stops might get triggered. 2019's low at 1.3708 is within reach and we could see further downside momentum should USD/AUD break out beyond.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(14) below 30" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/AUD. Out of 24 times, USDAUD closed lower 54.17% 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 62.50% with an average market move of -0.53%.