AUD/USD TECHNICAL OUTLOOK: BEARISH
- Australian Dollar sets another 11-year low, takes aim below 0.65 mark
- Rebound to 0.67 likely needed to neutralize near-term selling pressure
- Retail trader sentiment studies warn a rebound may be brewing ahead
The Australian Dollar continues to sink against its US counterpart having broken downward out of consolidation, as expected. The currency has plunged to levels unseen since March 2009, putting it within a hair of the bottom established at the peak of the 2008 global financial crisis.
From here, the next level of support is marked by the 78.6% Fibonacci expansion at 0.6464. A break below that confirmed on a daily closing basis may set the stage for a challenge of the 100% level at 0.6309. Alternatively, a move back above the 61.8% Fib – now recast as resistance – sets the stage for a test of 0.6671-90 resistance cluster. Breaking that is probably a prerequisite to neutralizing selling pressure.
AUD/USD daily chart created with TradingView
AUD/USD TRADER SENTIMENT
Retail sentiment data shows 74.12% of traders are net-long, with the long-to-short ratio at 2.86 to 1. The number of traders net-long is 7.81% lower than yesterday and 0.24% lower from last week, while the net-short count is 7.10% higher than yesterday and 5.72% higher 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. Yet positioning is less net-long than yesterday and compared with last week. This warns that a AUD/USD rebound may be brewing ahead.
See the full IGCS sentiment report here.
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
