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Weekly Technical Perspective on AUD/USD

Weekly Technical Perspective on AUD/USD

2018-05-21 17:32:00
Michael Boutros, Strategist
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In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key levels that matter on the weekly charts for the Australian Dollar. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

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AUD/USD Weekly Price Chart

AUD/USD Price Chart - Weekly Timeframe

Notes: Last week we noted that the Australian Dollar was, “testing BIG weekly support and IF price is going to rebound, this would be a good spot.” Price was unable to close below confluence support at 7480 with Aussie mounting a counter-offensive against the US Dollar early in the week. Note that the momentum profile looks similar to that of the late-2017 rebound and further highlights the risk for topside gains near-term - but stay nimble; the broader outlook remains tilted to the downside while within this descending pitchfork formation.

Bottom line: Look for initial resistance up towards 7636- a breach there would be needed to suggest that a larger reversal is underway / a more significant low is in place. A weekly close below 7480 would mark resumption for the broader downtrend with such a scenario targeting 7327. As noted in today’s webinar, for now, I’m willing to trade the long-side targeting slope resistance.

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 Sentiment
  • A summary of IG Client Sentimentshows traders are net-long AUDUSD- the ratio stands at +1.99 (66.5% of traders are long) – bearishreading
  • Retail has remained net-long since April 19th
  • Long positions are 10.3% lower than yesterday and 9.1% higher from last week
  • Short positions are 4.1% lower than yesterday and 6.5% higher 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. However, retail is less net-long than yesterday but more net-long from last week and the combination of current positioning and recent changes gives us a further mixed AUDUSD trading bias from a sentiment standpoint.

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

Previous Weekly Technical Perspectives

--- Written by Michael Boutros, Technical 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.

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