USDAUD closes above its opening price after recovering from early selling pressure
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
USDAUD finished the week -0.09% lower at 1.3716 after gaining 40 pips (0.29%) today. Trading up to 39 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. 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 Sep 18, 2020):
Friday's trading range has been 96 pips (0.7%), that's below the last trading month's daily average range of 126 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 1.3615 and 1.3785 where it has been caught now for the whole last trading week.
Notwithstanding a weak opening the currency managed to close above the previous day's open and close, forming a bullish Engulfing Candle.
Buyers managed to take out the key technical resistance level at 1.3682 (now S1), which is likely to act as support going forward. The last time this happened on September 8th, USDAUD actually lost -0.95% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 1.3785 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 1.3615 where further sell stops could get activated. With prices trading close to this year's low at 1.3488, downside momentum might accelerate should the forex pair break out to new lows for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for USD/AUD. Out of 696 times, USDAUD closed lower 52.01% 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 seven trading days, showing a win rate of 54.89% with an average market move of -0.05%.