Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD breakout stalls at confluence resistance at the yearly high / open
- Aussie at risk near-term while below 7042 - Broader outlook constructive while above 6660
The Australian Dollar is poised to snap an eight-day rally against the US Dollar with price reversing at confluence resistance at the yearly open today. While the broader focus remains higher, the advance may be vulnerable while below this key threshold. 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: In my last Australian Dollar Price Outlook we note that Aussie remained constructive but was approaching resistance – “Near-term bullish invalidation now raised to 6417 with break below the weekly open at 6380 risking a more significant correction in Aussie.” Price briefly registered a low at 6372 into the May open before surging a full 10% into the June open. AUD/USD is poised to mark an outside-day reversal today off a key resistance zone we’ve been tracking at 7005/42- a region defined by the January 2019 low-day close and the July / 2019 & 2020 yearly opens. The immediate advance remains vulnerable while below this threshold near-term.
Australian Dollar Price Chart – AUD/USD 240min
Notes: A closer look at Aussie price action sees AUD/USD trading within the confines of an ascending channel formation with an embedded consolidation pattern into the highs breaking to the downside today. Initial support objectives at 6856 backed by the February high at 6774 and key support at 6656/87- an area of interest for possible downside exhaustion IF reached. Weekly open resistance comes in at 6965 backed by 7005- look for a high below this level IF price is indeed heading lower. Ultimately, a breach / close above 7042 is needed to mark resumption of the broader uptrend.
Bottom line: The Australian Dollar is testing uptrend resistance at the yearly highs. While the broader focus remains weighted to the topside, the advance is vulnerable near-term while below key resistance. From at trading standpoint, a good spot to reduce long-exposure / raise protective stops. Be on the lookout for topside exhaustion ahead of the 70-handle for possible entries. 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 -2.22 (31.02% of traders are long) – bullish reading
- Long positions are 9.38% lower than yesterday and 10.19% lower from last week
- Short positions are0.39% lower than yesterday and 9.24% 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 | 5% | 15% | 7% |
| Weekly | 6% | -3% | 5% |
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Key Australia / US Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
