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 has rallied more than 6.6% against the US Dollar off the early-January low with the advance looking vulnerable just below technical resistance. These are the updated targets and invalidation levels that matter on the AUD/USD charts. 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 Price Chart - Daily Timeframe

Technical Outlook: In my latest AUD/USD Weekly Technical Outlook we noted that Aussie reversal was, “approaching the first major resistance hurdle, and a make-or-break pivot just higher near 7240s – look for a reaction there IF reached.” Price registered a high at 7235 last Friday before pulling back with Aussie drifting sideways this week. The risk remains for a deeper pullback here but ultimately, we’re looking for more favorable long-entries on a move lower.

Daily support rest at 7145 backed by the median-line of the proposed pitchfork extending off the 2018 / 2019 lows with broader bullish invalidation at 7005/21. A topside breach targets subsequent resistance objectives at 7276 and the 200-day moving average / 61.8% retracement at 7322/27.

Learn how to Trade with Confidence in our Free Trading Guide

AUD/USD 240min Price Chart

AUD/USD Price Chart - 240min Timeframe

Notes: A closer look at price action show AUD/USD trading within a tight range this week just above near-term support at 7145. A break below this level would risk a larger setback in price with such a scenario targeting the median-line (currently ~7100) backed by the yearly open at 7042 and the October low at 7021- both areas of interest for possible exhaustion if reached.

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

Bottom line: The Australian Dollar rebound off multi-year lows looks like it may have lost steam here and leaves the immediate advance vulnerable while below 7275. From a trading standpoint, we’re looking for a break of this channel for near-term guidance. A move lower would risk a larger correction in price – be on the lookout for downside exhaustion ahead of the yearly open IF this advance has legs.

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

AUD/USD Trader Positioning
  • A summary of IG Client Sentiment shows traders are net-long AUD/USD - the ratio stands at +1.22 (54.9% of traders are long) – weak bearishreading
  • Traders have remained net-long since December 4th; price has moved 1.9% lower since then
  • Long positions are3.7% lower than yesterday and 0.9% lower from last week
  • Short positions are 8.1% lower than yesterday and 3.3% 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. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger AUD/USD-bearish contrarian 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

Australia / US Economic Calendar - AUD/USD

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