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In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. The Aussie recovery failed at major resistance against the US Dollar last week with our focus on the near-term pullback in price. These are the updated targets and invalidation levels that matter on the AUD/USD weekly chart. 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 - Australian Dollar vs US Dollar Weekly - Aussie Outlook

Notes: In my latest Aussie Price Outlook we noted that, “a breach / close above 6972 is needed to fuel the next leg higher targeting the yearly low-day close at 7005- look for a bigger reaction there IF reached” A brief stint into the 50% retracement of the yearly range failed post-NFPs on Friday with price closing the week below the figure.

Key weekly resistance remains at 7020/42 with a breach above the June 2018 resistance slope (currently ~7080s) needed to validate a larger turn in price. Support rests at the 61.8% retracement of the May advance (also the May 20th reversal-week close) at 6925. A downside break of this formation (currently around ~6900) would once again keep the 2016 low / low-week close into focus at 6827/55- look for a more significant reaction there IF reached.

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

Bottom line: Aussie turned from a major resistance confluence last week and IF prices are indeed heading higher, losses should be limited to the lower parallel. From a trading standpoint, look for a support on a move lower to offer more favorable entries with a topside breach above channel resistance needed to shift the broader focus higher. Review my latest AUD/USD Price Outlook for a closer look at the near-term Aussie trading levels.

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

AUD/USD Trader Sentiment

AUD/USD Trader Sentiment - Australian Dollar vs US Dollar Positioning - Aussie Price Chart
  • A summary of IG Client Sentiment shows traders are net-long AUD/USD - the ratio stands at +1.84 (64.8% of traders are long) – bearish reading
  • Traders have remained net-long since April 18th; price has moved 2.9% lower since then
  • Long positions are 3.9% higher than yesterday and 8.0% higher from last week
  • Short positions are 1.7% higher than yesterday and 14.7% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Aussie 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!

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Key Australia / US Data Releases

Australia / US Data Releases - Economic Calendar

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

Previous Weekly Technical Charts

Learn how to Trade with Confidence in our Free Trading Guide

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex