Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD attempting fifth weekly advance – breaches key resistance at yearly highs
- Aussie constructive while above the weekly open- Initial resistance 7120 & 7200
The Australian Dollar is the top performeragainst the US Dollar this week with AUD/USD rallying more than 1.6% since the Sunday open. A breakout above critical confluence resistance today takes Aussie to fresh yearly highs and keeps the bulls in control while above the 2020 yearly open. These are the updated targets and invalidation levels that matter on the AUD/USD price charts in the days ahead. 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 noted that Aussie had “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.” Price has held below the 2019 / 2020 yearly open resistance zone at 7016/42 for nearly two weeks with AUD/USD breaking higher in European trade today. Note that this breach also marks a breakout of the objective yearly opening-range highs and keeps the trade constructive while above 7016/42. Daily resistance objectives eyed at the late-February / April 2019 swing highs at 7207 – look for a larger reaction there IF reached.
Australian Dollar Price Chart – AUD/USD 120min
Notes: A closer look at Aussie price action shows AUD/USD trading within the confines of an ascending pitchfork formation with breach above the median-line (a breach above 70 in RSI) today keeping the focus on initial resistance at the 75% parallel / April open at 7121. Look for downside exhaustion ahead of 7007/16 IF price is heading higher on this swing with a breach exposing the upper parallel near ~7170s and 7207. Ultimately a break below weekly open support at 6984 would be needed to invalidate this breakout / shift the focus lower.
Bottom line: The Australian Dollar is attempting a breakout of major technical resistance / the yearly highs and keeps focus higher while within this formation. From at trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into the upper parallels. Weakness should be limited to the July trendline to keep this breakout viable with a breach above 7206 needed to fuel the next leg higher in price. 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 -2.62 (27.6% of traders are long) – bullish reading
- Long positions are 19.51% lower than yesterday and 24.42% lower from last week
- Short positions are5.26% higher than yesterday and 10.25% 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 | -17% | 6% | -11% |
| Weekly | -29% | 64% | -13% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
