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AUD/USD Searches for Support as NFPs Take Center Stage

AUD/USD Searches for Support as NFPs Take Center Stage

Talking Points

  • AUD/USD approaches near-term support targets ahead of key data
  • Updated targets & invalidation levels

AUDUSD 120min

Chart Created Using TradingView

Technical Outlook: AUDUSD is trading within an expanding wedge formation with the recent decline responding to slope support today in New York. With markets focused on Non-Farm Payrolls this Friday, Australia’s retail sales report as well as the U.S. ISM manufacturing survey may have limited market reaction, especially as we head into the open of September trade. Although this is not the best environment for intraday trading, here are some levels to keep in mind.

Interim support rests at 7493 with a break lower targeting 7452/65 – an area of interest for exhaustion / long-entries. Interim resistance stands at the 61.8% retracement / weekly open at 7550/56 with a breach above the monthly open at 7590 would be needed to put the broader uptrend back in focus.

From a trading standpoint, I would be looking for a rebound off slope support (red) before making a final low into more critical support targets at 7407 & 7380(broader bullish invalidation & favorable long-entries). For the complete setup and to continue tracking this trade & more throughout the week- Subscribe to SB Trade Desk.

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  • A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net long AUDUSD- the ratio stands at +1.18 (54% of traders are long)- weak bearish reading
  • Yesterday the ratio was at 1.13% - Long positions are 3.8% higher than yesterday and 22.0% above levels seen last week
  • Open interest is 1.9% higher than yesterday and 6.5% above its monthly average.
  • The recent shift in retail positioning to net-long keeps the focus lower for now but keep in mind this is a relatively weak reading and we would want to see a more prominent build in long positioning to suggest that more significant decline is underway.

Help fine-tune you entries, click here to learn more about the DailyFX Grid Sight Index (GSI)

Relevant Data Releases This Week

Other Setups in Play:

Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016

---Written by Michael Boutros, Currency Strategist with DailyFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.