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Aussie Weekly Technical Outlook: AUD/USD Rebound Stalls Post-Fed

Aussie Weekly Technical Outlook: AUD/USD Rebound Stalls Post-Fed

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Aussie is poised to post a weekly doji just above yearly open support. These are the key targets and invalidations levels that matter on the AUD/USD weekly chart.

Looking for a fundamental perspective on AUD? Check out the Weekly AUD Fundamental Forecast.

Aussie is poised to post a weekly Doji against the US Dollar after prices pared the entire post-FOMC rally. These are the updated targets and invalidation levels that matter on the AUD/USD weekly chart heading into the close. 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 Weekly Price Chart

Notes: In last month’s AUD/USD Weekly Technical Outlook we noted that price needed to, “stabilize above 7000 for the January recovery to remain viable with a breach / close above 7270 needed to suggest a more significant low is in place.” Price registered a low at 7003 in early-March trade before rebounding with Aussie poised to close virtually unchanged this week on the heels of the FOMC interest rate decision.

Key weekly support stands at 7020/42 – a region defined by the 2019 open and the 50% retracement of the yearly range. A break / close below this threshold would expose the 61.8% retracement at 6955 backed by critical support at the 2016 low / low-week close at 6827/55 – Look for a bigger reaction there IF reached. Resistance & near-term bearish invalidation now lowered to 7233 with a breach above confluence resistance at 7295-7327 needed to shift the broader focus higher in the Australian Dollar targeting the December highs.

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

Bottom line: The broader risk remains weighted to the downside sub-7233 for now, with a break / close below yearly open support needed to mark resumption of the broader downtrend. From a trading standpoint, be on the lookout for possible price exhaustion on a move towards the June resistance line. I’ll publish an updated AUD/USD Technical Outlook once we get further clarity in near-term price action.

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AUD/USD Trader Sentiment

AUD/USD IG Trader Sentiment
  • A summary of IG Client Sentiment shows traders are net-short AUD/USD - the ratio stands at +1.37 (57.8% of traders are long) – weak bearish reading
  • Long positions are13.1% higher than yesterday and 9.0% lower from last week
  • Short positions are 19.0% lower than yesterday and 12.4% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Aussie 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!

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--- Written by Michael Boutros, Technical 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.