Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD approaches multi-week range / slope support
- Near-term support 7700, 7675(key) – resistance / bearish invalidation 7770
The Australian Dollar is on defensive against the US Dollar post- RBA with AUD/USD down more than 0.7% in early US trade. The decline takes Aussie with in striking range of key support at multi-week range lows and we’re looking for possible price inflection here early in the month. 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 the AUD/USD, “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.” Aussie registered an intraday high at 7817 before faltering with the pullback now testing multi-week range support at the 7701/08 technical confluence- a region defined by the 38.2% Fibonacci retracement of the April range and the objective 2021 yearly open. Note that that multi-month trendline support rests just lower and a break / close below would be needed to suggest a larger turn is underway. Key resistance steady at the 2018 yearly open / 61.8% retracement of the yearly range at 7801/25.
Australian Dollar Price Chart – AUD/USD 120min
Notes: A closer look at Aussie price action shows AUD/USD trading within the confines of a descending pitchfork formation extending off the April highs with the weekly opening-range taking shape just above the 77-handle. Initial resistance stands at 7757 with near-term bearish invalidation now lowered to the 7771. A break lower from here would expose subsequent support objectives at the 50% retracement / median-line at ~7675 backed by the 61.8% retracement at 7641- look for a larger reaction there IF reached.
Bottom line: The Australian Dollar is testing the lower-bounds of a multi-week price range with the monthly opening-range taking shape just above slope support- we’re on breakout watch. From at trading standpoint, a good zone to reduce short exposure / lower protective stops – be on the lookout for topside exhaustion ahead of the upper parallel IF price is indeed heading lower with a break / close below 7675 needed to mark resumption of the late-April sell-off. 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 -1.18 (45.84% of traders are long) – neutral reading
- Long positions are 10.23% lower than yesterday and 15.46% higher from last week
- Short positions are14.13% higher than yesterday and 17.56% 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. Traders are more net-short than yesterday but less net-short from last week. The combination of current positioning and recent changes gives us a further mixed AUD/USD 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
