Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD craves monthly opening-range just below technical resistance
- Constructive while above-7635 - Key resistance into 7836
The Australian Dollar is fractionally higher against the US Dollar this week after paring early losses with the broader Aussie rally still vulnerable while below a key resistance zone we’ve been tracking for months now. These are the updated targets and invalidation levels that matter on the AUD/USD technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Aussie 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 noted to be on, “the lookout for a reaction on a stretch towards the upper parallels / Fibonacci resistance for guidance IF reached. Use caution here – the advance is mature and the risk rises for a washout as price approaches pitchfork resistance.” Aussie rallied to a key resistance confluence into the yearly open at the 2018 yearly open / 88.6% Fibonacci retracement of the 2018 decline at 7801/36 (high registered at 7820) before turning lower with the monthly opening-range now set just below.
Monthly open support rests at 7701 backed by 7635 / the median-line – a break / close below would be needed to suggest a larger bull-market correction is underway towards the lower parallels / 2018 May low-day close at 7455. A topside breach of this key resistance zone exposes pitchfork resistance / the March 2018 high at 7916- 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 a near-term descending pitchfork formation with price testing the upper parallel in early US trade. Although a breach here would shift the focus higher heading into Friday, key resistance stands just higher into 7801/36- look for inflection there IF reached with a breach likely to fuel an accelerated breakout. Initial support 7732 backed by the weekly opening-range low at 7666 and 7627/35.
Bottom line: The Australian Dollar pulled back from uptrend resistance and the immediate focus is on a breakout of the January opening-range for guidance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into 7801/36 with the broader Aussie advance vulnerable while below this threshold. Ultimately, a larger pullback may offer more favorable opportunities with a breach / close above the monthly range highs 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 -1.09 (47.75% of traders are long) – neutral reading
- Long positions are 18.67% higher than yesterday and 38.30% higher from last week
- Short positions are3.40% lower than yesterday and 1.63% lower 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. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current AUD/USD price trend may soon reverse lower despite the fact traders remain net-short.
| Change in | Longs | Shorts | OI |
| Daily | -4% | -10% | -6% |
| Weekly | -1% | 25% | 3% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
