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AUD/USD statistical and technical analysis

The current price of the AUD/USD exchange rate is 0.7624 (April 13, 2021). This pair slightly corrected its longer-term upward trend last month. The Australian Dollar is highly correlated with commodities. It is currently trading close to an important level this year. Therefore, we will look at statistical and technical analyzes.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 0.55% and -0.58%, respectively. The estimated daily return in both directions based on their probability of occurrence is 0.28% and -0.27% . YesterdayΒ΄s return was only 0.04% . Our scoring is currently neutral (0 ) for the month-on-month change and 1 for price indexation. This means that we are in a slightly positive phase of the cycle. Both scorings range from -3 up to 3 . The estimated cycles development based on our analytical systems is shown in the following chart.

AUD/USD price indexation and cycles Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. According to the monthly MA, AUD/USD is in bearish sentiment, after falling below it. As we can see in the chart below, the 6 months and annual MAs are still in bullish sentiment. In the event of a decline, the 6-month MA can be an important support for the exchange rate.

AUD/USD daily price with monthly change Source: WALFIR

Since the outbreak of the COVID-19 epidemic, there have been more upward trends. Last summer, a maximum of 7 consecutive days was reached. Downward trends did not exceed more than 5 days in the same period. The maximum in the measured period is 11 days. We could use the average ATR (Average True Range) obtained from daily data (1.23% ) to estimate Stop Loss orders for our positions. The current value is 0.59% . Approximately 90% confidence interval (return between -1.2% and 1.2% ) is shown in the histogram below by a red rectangle.

AUD/USD daily return distribution Source: WALFIR

We could use the last decile of low to high returns (1.75% ) to estimate Profit Targets, as shown in the chart below.

AUD/USD low to high distribution Source: WALFIR

Basic technical analysis still supports longer-term bullish sentiment, as the exchange rate creates higher lows and higher highs. This pair is in a short-term correction. However, we can clearly see a bullish divergence between the market price and the RSI. At the beginning of the month, the volumes were also above average. The AUD/USD is currently close to an important psychological level of 0.7600 , which could be a support for this pair. In the event of a further decline, the longer-term moving average, the psychological level of 0.7400 and the Fibonacci retracement level of 23.60% could be a strong support for bulls.

AUD/USD basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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