Australian Dollar Price Outlook: Aussie Holds Yearly Open Resistance
Australian Dollar Technical Price Outlook: AUD/USD Weekly Trade Levels
- Australian Dollar technical trade level update - Weekly Chart
- AUD/USD price rally falters at yearly highs – 2019 /2020 yearly opens
- Aussie constructive while above 6660- Resistance at 7042 & 7120
The Australian Dollar rallied more than 28% off the yearly lows against the US Dollar before turning lower this week with AUD/USD down 1.22% into the open of New York trade. The reversal off technical resistance leaves the rally at risk here but IF Aussie is indeed heading higher, the losses should be limited. These are the updated targets and invalidation levels that matter on the AUD/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie trade setup and more.
Australian Dollar Price Chart – AUD/USD Weekly
Notes: In my last Australian Dollar Weekly Price Outlook we noted that the Aussie rebound was, “testing the first major resistance hurdle here just below the 62-handle. From a trading standpoint, we’re on the lookout for an exhaustion low while above 5800 with a breach higher exposing topside objectives,” heading into April. AUD/USD broke higher on April 8th before mounting a rally of more than 14% to a fresh yearly high- the advance stalled into a critical resistance confluence at 7016/42 – a region defined by the objective 2019 & 2020 yearly opens. The immediate long-bias may be vulnerable while below this pivot zone.
Initial weekly support rests with the 2019 low close at 6733 with key support now back at the 2008 low-week close / 2019 swing low at 6660/70- a close below this threshold would threaten a larger correction in price towards 6469. A topside breach / close above 7042 exposes subsequent resistance objectives at the 61.8% retracement of the 2018 decline at 7120 with and the 2018 swing high / May 2017 low at 7295-7328.
Bottom line: The Australian Dollar rally faltered at confluence resistance with a weekly reversal off fresh yearly highs threatening a larger pullback. From a trading standpoint, look for downside exhaustion ahead of 6660 IF price is indeed heading higher with a breach above 7120 ultimately needed to clear the way for a leg higher in price. 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 -2.12 (32.02% of traders are long) – bearish reading
- Long positions are 6.49% lower than yesterday and 3.52% higher from last week
- Short positions are0.53% lower than yesterday and 4.39% 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.
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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.