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- Aussie sets monthly / weekly opening-range just above key slope support
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AUD/USD Daily Chart
Technical Outlook: We last visited AUDUSD in mid-August when the pair was testing the lower parallel of this ascending median-line formation. Targets at the “50% retracement of the August decline at 7937 backed closely by the 61.8% retracement at 7967” have already been taken out with the rally failing just pips ahead of confluence support at 8032. The focus heading into September trade is now on a break of the monthly opening-range which has taken shape just above slope support.
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Notes:A closer look at price action further highlights near-term confluence support into the monthly opening-range low at 7921 with our bullish invalidation level now set to 7892. Soft resistance remains with the August open at the 80-handle with a breach above 8032 targeting 8088 backed by the longer-term 100% extension at 8153.
Bottom line: look for a break of this near-term range with our broader focus higher while within this formation. A break below the 61.8% retracement would invalidate the long-bias with such a scenario risking a drop into support objectives at 7835 & 7778/84.
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- A summary of IG Client Sentiment shows traders are net-shortAUDUSD- the ratio stands at -1.94 (36.0% of traders are long) –bullish reading
- Retailhas remained net-short since June 4th; price has moved 6.6% higher since then
- Long positions are 8.0% higher than yesterday but1.2% lower from last week
- Short positions are 1.9% higher than yesterday and7.0% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUDUSD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current positioning and recent changes gives us a further mixed AUDUSD trading bias from a sentiment standpoint.
See how shifts in AUD/USD retail positioning are impacting trend- Click here to learn more about sentiment!
Relevant Data Releases
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at email@example.com.