USDAUD closes within previous day's range
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
USDAUD ended the month -3.35% lower at 1.4000 after gaining 101 pips (0.73%) today on high volume. 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 31, 2020):
Friday's trading range has been 182 pips (1.31%), that's far above the last trading month's daily average range of 130 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.
Even with a weak opening the currency managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on July 23rd, USDAUD actually lost -0.11% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 1.4043 (R1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 1.4043 where further buy stops might get triggered. 2019's low at 1.3708 is within reach and we could see further downside momentum should the market break out beyond.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week Low" stand out. Its common bearish interpretation has been confirmed for USD/AUD. Out of 53 times, USDAUD closed lower 54.72% 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 52.83% with an average market move of -0.07%.