Never miss a story from Michael Boutros

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

The Australian Dollar is down more than 2.7% against the greenback month-to-date with price trading just above confluence technical support into the weekly open. These are the updated targets and invalidation levels that matter on the AUD/USD charts heading into FOMC interest rate decision. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

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

AUD/USD Daily Price Chart

AUD/USD Daily Price Chart

Technical Outlook: In my latest AUD/USD Weekly Technical Outlook we noted that Aussie was, “carving its monthly opening range just below technical resistance an leaves price vulnerable to further losses while below 7385. From a trading standpoint, look for a reaction on a move into Fibonacci support at 7163,” – where the 61.8% retracement of the late-October advance converges on pitchfork support extending off the yearly lows. Price registered a low at 7151 last week before rebounding and the focus is on reaction off this confluence support zone heading into FOMC on Wednesday.

A break below this threshold exposes former channel resistance (currently ~7120s) and the yearly low-day close at 7087. Initial resistance stands with the 100-day moving average with a breach above the 25% line around ~7260s to mark resumption of the broader uptrend. Critical resistance steady at 7327/36.

Learn how to Trade with Confidence in our Free Trading Guide

AUD/USD 240min Price Chart

AUD/USD 240min Price Chart

Notes: A closer look at price action highlights the near-term support confluence around 7160/63- IF Aussie is going to hold the October advance, we’ll want to see things stabilize above this threshold. Interim resistance stands at 7200 backed by 7223 and 7244/43- look for a break there to test the median-line.

Even the most seasoned traders need a reminder every now and then- Avoid these Mistakes in your trading

Bottom line: Aussie is testing multi-month uptrend support and price would need to stabilize above 7160 IF the October advance is to remain viable. From a trading standpoint, I’m looking for downside exhaustion on a move into this zone with a breach / close above the 100DMA needed to suggest a more significant near-term low is in place. A break lower would keep the focus on the yearly low-day close.

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

AUD/USD Trader Sentiment

Please add a description for the image.
  • A summary of IG Client Sentiment shows traders are net-long AUD/USD - the ratio stands at 2.02 (66.8% of traders are long) – bearishreading
  • Traders have remained net-long since December 4th; price has moved 2.2% lower since then
  • Long positions are1.1% higher than yesterday and 7.7% higher from last week
  • Short positions are 17.8% higher than yesterday and 13.2% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/USD prices may continue to fall. Yet traders are 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 AUD/USD trading bias from a sentiment standpoint.

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

---

Relevant AUD/USD Data Releases

AUD/USD Economic Calendar

Economic Calendar - latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide!

Active Trade Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

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