Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD near-term breakout underway- rally targeting initial uptrend resistance
- Near-term support 7664, 7593(key) - resistance objectives into 7770 & 7800/36
The Australian Dollar has surged more than 3% off the monthly / yearly lows against the US Dollar with a near-term price breakout taking AUD/USD towards uptrend resistance. While a breach above the April range keeps the broader focus higher, the immediate advance may be vulnerable as Aussie goes for a third consecutive daily advance. 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 we noted that AUD/USD was testing slope support near 7635 with a break lower exposing “subsequent objectives at the yearly low at 7563 and the 100% extension at 7522- look for a larger reaction there IF reached.” Price registered a low at 7531 into the start of April trade before rebounding – a breach of the January trendline / April monthly opening-range yesterday has fueled a near-term breakout with the advance now targeting initial resistance objectives at the 50% retracement / 25% parallel at ~7770 with critical resistance just higher at the 2018 yearly open / 61.8% Fibonacci retracement at 7801/25- looking 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 continuing to trade within the confines of a modified ascending pitchfork formation extending off eh March / April lows with rally testing the upper parallel on building momentum divergence in early US trade today. Initial support rests back at the 2021 objective yearly open at 7701 backed by 7664 and the weekly open at 7617. Broader bullish invalidation now stands with the monthly open at 7593.
Bottom line: The Australian Dollar breakout is now approaching initial uptrend resistance objectives. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch towards the upper parallel / 7800 – an area of interest for possible price inflection / exhaustion IF reached. Ultimately a pullback may offer more favorable opportunities closer to uptrend support with a breach / close above the yearly high-day reversal close at 7871 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 -1.23 (44.9% of traders are long) – neutral reading
- Long positions are 6.82% lower than yesterday and 22.52% lower from last week
- Short positions are2.11% higher than yesterday and 7.98% 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% | -1% |
| Weekly | 14% | 1% | 11% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
