AUD/USD Technical Analysis: Aussie Dollar Selloff May Continue
AUD/USD TECHNICAL OUTLOOK: BEARISH
- Australian Dollar down to 11-year low after range support break
- Break into upper 0.67s likely needed to neutralize selling pressure
- Retail sentiment studies favor downside, near-term view clouded
The Australian Dollar has capitulated after a consolidative pause, as expected. The currency found interim support in the 0.6671-90 area – a range floor in play since early August – and briefly looked as though it may attempt a corrective bounce. That was not to be as prices plunged to an 11-year low.
From here, a daily close below the 38.2% Fibonacci expansion at 0.6608 may set the stage for a test of the 0.6550-64 area (50% level, November 2008 monthly close). Breaking back above falling trend line resistance in play since the start of 2020 is probably a prerequisite to neutralizing near-term selling pressure.
AUD/USD TRADER SENTIMENT
Retail trader data shows 75.22% of traders are net-long, with the long-to-short ratio at 3.04 to 1. The number of traders net-long is 3.39% higher than yesterday and 8.29% higher from last week, while the number of traders net-short is 12.45% higher than yesterday and 13.83% lower from last week.
IG Client Sentiment(IGCS) is typically used as a contrarian indicator, so traders being net-long suggests AUD/USD may continue to fall.Positioning is less net-long than yesterday but more so than last week. This makes for a clouded sentiment-basedtrading bias.
AUD/USD TRADING RESOURCES
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.