- Aussie testing key confluence resistance pivot – longs at risk near-term sub-7022/42
- Check out our 2019 projections in our Free DailyFX US Dollar Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
The Australian Dollar is testing a major resistance confluence for the fourth consecutive week and the focus is on a reaction off this key pivot zone. These are the updated targets and invalidation levels that matter on the Aussie (AUD/USD) weekly price chart. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this gold price setup and more.
Aussie Price Chart - AUD/USD Weekly
Notes: In my last Aussie Price Weekly Outlook we highlighted, “key weekly resistance at 7020/42 with a breach above the June 2018 resistance slope needed to validate a larger turn in price.” AUD/USD has been testing this resistance zone for the past four weeks with price registering a high at 7044 on Tuesday before turning lower. The immediate threat may be lower but we’re looking for entries on downside exhaustion in the days ahead.
Weekly support rests at the low-week close at 6924 backed by the 2016 low-week close / low at 6827/55 (critical). Note that weekly RSI has continued to hold sub-50 since the start of the year- look for the breach with a topside break above this confluence resistance zone in price needed to shift the focus to the 61.8% retracement of the January decline at 7118 and the April high-week reversal close at 7148.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom line: Aussie is trading just below a critical pivot zone we’ve been tracking for months now at 7020/42. From a trading standpoint, we’re looking for support on this pullback to limit losses ahead of 6924 IF price is indeed heading higher with a breach / close above yearly open resistance needed to shift the broader focus higher in AUD/USD. I’ll publish an updated Aussie Price Outlook once we get further clarity in near-term price action.
Even the most seasoned traders need a reminder every now and then-Avoid these Mistakes in your trading
Aussie Trader Sentiment (AUD/USD)
- A summary of IG Client Sentiment shows traders are net-short AUD/USD - the ratio stands at -1.3 (43.6% of traders are long) – weak bullish reading
- The percentage of traders net-long is now its lowest since April 4th
- Long positions are 7.6% lower than yesterday and 25.3% lower from last week
- Short positions are 9.5% higher than yesterday and 43.8% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUD/USD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger AUD/USD-bullish contrarian trading bias from a sentiment standpoint.
See how shifts in Aussie retail positioning are impacting trend- Learn more about sentiment!
Key Australia / US Data Releases
Previous Weekly Technical Charts
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex