Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD attempting third weekly advance – vulnerable below critical yearly open resistance
- Aussie weekly opening-range taking shape just above uptrend support
The Australian Dollar rallied more than 3.2% off the June lows with the advance once again approaching critical resistance near the 2020 open / yearly high. A weekly opening-range is taking shape just below and we’ll look to the break for guidance as price compresses into uptrend support. 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 last month’s Australian Dollar Price Outlook we note that Aussie was “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.” The zone in focus was 7005/42- a region defined by the January 2019 low-day close and the July / 2019 & 2020 yearly opens. Price turned sharply lower off this threshold with Aussie falling more than 4% off the highs before rebounding into the close of the month.
AUD/USD continues to trade within the confines of an ascending channel formation with price approaching this critical resistance zone again this week. Note that monthly open support now converges on the April trendline at 6903- a break / close below would risk a larger correction in price towards the February high at 6774 and broader bullish invalidation at 6660/88. A topside breach would keep the focus on subsequent resistance objectives into 7200.
Australian Dollar Price Chart – AUD/USD 120min
Notes: A closer look at Aussie price action sees AUD/USD trading within the confines of an ascending pitchfork formation with the advance failing to breach median-line resistance early in the week. Weekly open support rests at 6928 backed by the July open at 6903- on the lookout for possible downside exhaustion into this threshold IF price is indeed heading higher. Initial resistance objectives at 6976 backed by the 100% Fibonacci extension / yearly open at 70007/16 and 7042- a close above this threshold is needed to keep the long-bias viable.
Bottom line: The Australian Dollar has set the weekly opening-range just above the objective weekly open- we’re looking for a break for guidance with the advance vulnerable while below the yearly opens. From a trading standpoint, be on the lookout for downside exhaustion ahead of the monthly open with a breach above 7042 needed to mark resumption of the broader uptrend. 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 -1.9 (34.52% of traders are long) – bullish reading
- Long positions are 1.61% lower than yesterday and 8.51% lower from last week
- Short positions are0.33% lower than yesterday and 4.93% 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 | -9% | 17% | 0% |
| Weekly | -35% | 67% | -13% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
