Talking Points
- AUDUSD eyes critical support zone ahead of Australia jobs report
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: The Aussie outlook remains largely unchanged from late-last month and heading into tonight’s Australian employment report I’m on the lookout for a possible drop into a critical support zone at 7380-7408. This level is defined by the lower median-line parallel of the near-term descending pitchfork & the 61.8% retracement of the advance off the May low and converge on a longer-term key structural support extending off the yearly low.
From a trading standpoint I would be looking to fade weakness into this critical support zone with interim resistance seen at 7493 backed by the weekly opening at 7538. A breach above the weekly opening-range high at 7568 would be needed to validate the reversal higher in Aussie. 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 longAUDUSD- the ratio stands at 1.72 (63% of traders are long)- bearish reading
- Long positions are 33.2% above levels seen last week while Short positions are 42.4% lower over the same time period.
- Open interest is 3.5% higher than yesterday and 5.1% below its monthly average.
- The recent flip to net-long exposure leaves the near-term pullback at risk. Note that SSI peaked at +2.50 in January as AUD/USD marked the 2016-low. As a result, a further build-up of long-positions would further support the notion of a turn in price as the exchange rate approaches key support.
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Relevant Data Releases This Week
Other Setups in Play:
- GBP/JPY & BoE: Weakness to Be Viewed as Opportunity
- NZD/USD: Bearish Bias Intact as FX Sentiment Narrows Ahead of GDP
- GBP/USD: Constructive Above 1.3155- Buy the Dip Setup into UK CPI
- Webinar: FX Majors In the Crosshairs as Seasonals Turn Against USD
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---Written by Michael Boutros, Currency Strategist with DailyFX
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