News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
More View more
AUD/USD Price Analysis: Pending Consolidation Break to Fuel Next Leg

AUD/USD Price Analysis: Pending Consolidation Break to Fuel Next Leg

2018-05-18 17:00:00
Michael Boutros, Strategist
Share:

The Australian Dollar has continued to trade within a 2% range (150pips) since the start of May trade with price setting a well-defined monthly opening-range just above weekly support. While the broader risk remains weighted to the downside, the immediate bias remains vulnerable near-term while above this week’s lows. Here are the levels that matter for AUD/USD heading into the close of the week.

AUD/USD Daily Price Chart

AUD/USD Price Chart - Daily Timeframe

Technical Outlook: In last month’s Weekly Technical Perspective we highlighted that a break of support in the Aussie left the, “near-term risk lower in price while below 7635. Subsequent support objectives are eye at the median-line / 50% retracement of the 2016 advance at 7480-7500.” Price is trading in this range now after registering a low at 7412 last week. Note that AUD/USD posted a weekly Doji off this support zone and the immediate downside bias remains vulnerable while above 7480 on a weekly close basis.

The daily chart is a bit messy here but the focus is on a break of the well-defined May opening-range to offer guidance. Initial resistance is eyed at 7567 with bearish invalidation steady at 7635. A break lower from here targets 7379 backed by the 61.8% retracement of the 2016 advance at 7327.

New to Forex Trading? Get started with this Free Beginners Guide

AUD/USD 240min Price Chart

AUD/USD Price Chart - 240min Timeframe

Notes: A closer look at price action sees the Australian dollar consolidating just above the 7480 support zone- look for a break of this pattern. A topside breach risks a correction towards 7602 or even 7637 – both areas of interest for possible exhaustion IF reached.

Why does the average trader lose? Avoid these Mistakes in your trading

Bottom line: Aussie is testing BIG weekly support here and IF price is going to rebound, this would be a good spot. From a trading standpoint, if you’re short, look to move in protective stops just above this formation. A topside breach would offer opportunities to play the long-side targeting 7600 but be nimble- the broader outlook still remains tilted to the downside after breaking below slope support last month.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

AUD/USD IG Client Positioning

AUD/USD Client Positioning
  • A summary of IG Client Sentimentshows traders are net-long AUDUSD- the ratio stands at +2.14 (68.1% of traders are long) –bearishreading
  • Retail has remained net-long since April 19th; price has moved 3.6% lower since then
  • Long positions are 5.6% higher than yesterday and 13.5% higher from last week
  • Short positions are 0.5% higher than yesterday and 1.3% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUDUSD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger AUDUSD-bearish contrarian trading bias from a sentiment standpoint.

See how shifts in AUD/USD retail positioning are impacting trend- Learn more about sentiment!

---

Relevant Data Releases

AUD/USD Economic Calendar

Other Setups in Play

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com

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

DISCLOSURES