Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD Reverses off confluence resistance – near-term risk is lower sub-6371
- Broader outlook constructive while above monthly open support.
The Australian Dollar is down more than 2.5% from the monthly highs vs the US Dollar with Aussie turning from major technical resistance last week. While the near-term threat remains lower, the decline may offer more favorable positioning on a test of uptrend support. These are the updated targets and invalidation levels that matter on the AUD/USD price charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie trade setup and more.
Australian Dollar Price Chart – AUD/USD Daily
Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview
Technical Outlook: The Australian Dollar rallied into a critical resistance zone last week at 6417/49- a region defined by the 61.8% retracement of late-December decline and the 61.8% extension of the March Rally. Price registered a high at 6445 before reversing sharply and the immediate focus is on a this pullback. Initial daily support rests at the confluence of March channel line and the 100% extension at 6217- broader bullish invalidation now raised to the monthly open at 6135. A breach / close above 6448 is needed to mark resumption of the March rally with such a scenario exposing subsequent resistance objectives at 6660/87.
Australian Dollar Price Chart – AUD/USD 120min
Notes: A closer look at Aussie price action sees AUD/USD trading within the confines of a near-term descending pitchfork formation with price rebounding off the 25% line today in early New York trade. Initial resistance at the median-line with near-term bearish invalidation set to the weekly open / 61.8% retracement at 6360/71. Look for a reaction off confluence support at 6217 – a break below this level is needed to keep the near-term short-bias viable towards subsequent support objectives at 6181 and the monthly open at 6135 – both levels of interest of possible downside exhaustion IF reached.
Bottom line: The Australian Dollar has reversed off confluence resistance and while the immediate threat remains lower, ultimately we’re looking for a larger pullback to offer more favorable entries. From a trading standpoint, look for topside exhaustion while below the weekly open with a break below 6217 needed to suggest a larger turn is underway. Review my latest Australian Dollar Weekly Price Outlook for a closer look at the longer-term AUD/USD technical trade 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
- A summary of IG Client Sentiment shows traders are net-short AUD/USD - the ratio stands at -1.69 (37.11% of traders are long) – bullish reading
- Long positions are 17.89% lower than yesterday and 21.61% lower from last week
- Short positions are10.54% higher than yesterday and 17.09% 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.
| Change in | Longs | Shorts | OI |
| Daily | -11% | 16% | -5% |
| Weekly | -11% | 5% | -7% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
