Australian Dollar Forecast: Aussie March Lower- AUD/USD Eyes 2021 Low
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Australian Dollar Technical Price Outlook: AUD/USD Weekly Trade Levels
- Australian Dollar technical trade level update - Weekly Chart
- AUD/USD reversal looks to challenge 2021 range lows
- Aussie key support into 7563– key resistance back at 7836
The Australian Dollar has plummeted more than 4.8% against the US Dollar off the January highs with the late-February sell-off carrying over into the start of March trade. The reversal off multi-year highs threatens a deeper correction in the weeks ahead – our focus is on a reaction on a test of the yearly range lows just lower. These are the updated targets and invalidation levels that matter on the AUD/USD weekly price chart heading into the close of the year. for an in-depth breakdown of this Aussie technical setup and more.
Australian Dollar Price Chart – AUD/USD Weekly
Notes:In last month’s Australian Dollar Weekly Price Outlook we noted that the AUD/USD breakout kept, “the broader focus higher in price but the advance may be vulnerable into the close of the month as weekly momentum stretches into multi-year highs.” An outside-week reversal candle off the highs into the February close on building momentum divergence highlighted the threat for Aussie exhaustion with price now attempting to mark a weekly close back below yearly open support at 7701 (note that the yearly high-week close now comes in at 7705).
Weekly support now rests at the yearly opening-range lows at 7563 and is backed closely by basic trendline support extending off the late-April lows- a break / weekly close below this threshold would be needed to suggest a more significant high was registered last month with such a scenario exposing initial support objectives at the May 2017 low-week close at ~7385. Initial resistance steady at 7701/05 with a breach / close above 7836 needed to mark resumption of the broader uptrend.
Bottom line: The Australian Dollar now risks a deeper March correction with the AUD/USD price reversal approaching multi-month uptrend support. From a trading standpoint, look to reduce short exposure / lower protective stops on a stretch towards 7563 / channel support- keep an eye for a larger reaction there IF reached. Ultimately, a larger setback may offer more favorable opportunities with a close back above this week’s highs needed to reassert the broader long-bias. Review my latest Australian Dollar Price Outlook for a closer look at the near-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 +1.01 (50.22% of traders are long) – neutralreading
- Long positions are 11.09% lower than yesterday and 24.57% higher from last week
- Short positions are2.74% lower than yesterday and 6.47% higher 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. Yet traders are less net-long than yesterday but more net-long from last week and the combination of current positioning and recent changes gives us a further mixed AUD/USD trading bias from a sentiment standpoint.
Key Australia / US Data Releases
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Previous Weekly Technical Charts
- Sterling (GBP/USD)
- Canadian Dollar (USD/CAD)
- Gold (XAU/USD)
- Australian Dollar (AUD/USD)
- Crude Oil (WTI)
- Euro (EUR/USD)
- US Dollar (DXY)
- Japanese Yen (USD/JPY)
--- 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.