Talking Points
- AUDUSD rally at risk ahead of U.S. Durable Goods Orders
- Updated targets & invalidation levels
- Headline print expected to contract for the 4th time in 2016
AUDUSD 120min
Chart Created Using TradingView
Technical Outlook: The Aussie rallied failed just ahead of the August high-day close, a level the pair has been unable to close above for the past two months. Bearish divergence into the highs leaves the immediate topside bias at risk with a possible median-line formation identified earlier today.
Interim support rests with the September high-day close at 7642 backed by the weekly opening-range lows / 38.2% retracement at 7599-7603. More significant support rests at the 7568- also an area of interest for possible exhaustion / long-entries.
The focus remains lower while below the upper median-line parallel (blue) with a breach above 7699 (bearish invalidation) needed to fuel the next leg higher in the pair. Such a scenario targets subsequent resistance objectives at the 2016 high-day close at 7735 & the 88.6% retracement at 7756.
From a trading standpoint I’ll be looking for a pullback towards longer-term slope support for long-entries. Keep in mind we also have numerous Fed members on tap this week as well, including Chair Yellen. For the complete setup and to continue tracking this trade & more throughout the week- Subscribe to SB Trade Desk.
- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net shortAUDUSD- the ratio stands at -1.42 (41% of traders are long)- weak bullish reading
- Long positions are 22.1% below levels seen last week while short positions are 22.1% higher during the same period.
- Open interest is 0.9% lower than yesterday but 5.4% above its monthly average
- The last time SSI was at this extreme (-1.41) was on September 6th, two days before the monthly high was registered. The recent dynamic suggests that the near-term risk remains for a pullback before resumption of the broader up-trend.
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:
- Webinar: Fed Rhetoric to Keep USD Crosses in Focus Post-FOMC
- GBP/AUD at Risk for Key Reversal Above 1.6977
- CAD Rally Looks to CPI, Retail Sales for Fuel
- NZD/USD: Near-term Range Braces for RBNZ; Key Resistance 7450
- USD/JPY at Risk for Major Washout as Traders Gear Up For BoJ, FOMC
Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016
---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list
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