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Australian Dollar Price Outlook: Aussie at Key Support – Trade Levels

Australian Dollar Price Outlook: Aussie at Key Support – Trade Levels

2019-11-26 16:30:00
Michael Boutros, Technical Strategist
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The Australian Dollar is marginally weaker against the US Dollar this week with Aussie setting up a well-defined weekly opening-rang just above critical support and just below monthly trendline resistance. These are the updated targets and invalidation levels that matter on the AUD/USD price charts heading into the close of November trade. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Sterling price setup and more.

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Australian Dollar Price Chart – AUD/USD Daily

Australian Dollar Price Chart - AUD/USD Daily - Aussie Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview

Technical Outlook: In my latest Australian Dollar Price Outlook we noted that Aussie had, “responded to long-term downtrend support at 6768/70. From at trading standpoint, the immediate focus is on this near-term recovery – look for a reaction / pivot on a stretch towards slope resistance for guidance.” Our focus was on reaction up at 6830- price registered a high at 6835 in the following days before reversing sharply with Aussie carving out the weekly opening-range just above the 6770-support zone.

A break / close below this threshold would expose a larger constitute a break of the monthly opening-range- such a scenario would expose a larger decline towards the median-line / January low at 6745- we’ll reassess the decline there IF reached. Daily resistance stands at 6810 with a close above 6830 needed to turn the tide on this decline.

Australian Dollar Price Chart – AUD/USD 120min

Australian Dollar Price Chart - AUD/USD 120min - Aussie Trade Outlook - Technical Forecast

Notes: A closer look at Aussie price action shows AUD/USD continuing to trading within the confines of a descending pitchfork formation extending of the October highs. The immediate focus is on a break of the weekly opening-range here just above key support. Weekly open resistance stands at 6790 with a breach above 6810 needed to suggest a larger recovery is underway targeting 6830 and 6850. A downside break from here exposes the lower parallel / 6745- look for a larger reaction there IF reached. Weakness beyond there would likely risk accelerated losses targeting the September open at 6724.

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Bottom line: The Australian Dollar sell-off has is testing key Fibonacci support / November opening-range lows heading into the close of the month and a shortened holiday week- use caution here. From at trading standpoint, we’re on the lookout for an exhaustion low with a breach above the median-line needed to fuel a larger recovery in Aussie. Review my latest Aussie Weekly Price Outlook for a closer look at the longer-term AUD/USD technical trading levels.

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

Australian Dollar Trader Sentiment – AUD/USD Price Chart

Australian Dollar Trader Sentiment - AUD/USD Price Chart - Aussie Trade Outlook - Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-long AUD/USD - the ratio stands at +1.98 (66.43% of traders are long) – bearish reading
  • Long positions are 6.12% higher than yesterday and 16.75% higher from last week
  • Short positions are5.01% lower than yesterday and 11.82% 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 and 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 Economic Calendar - AUD/USD Key Data Releases - Aussie Trade Outlook

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- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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