News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Australian Dollar Forecast: Aussie Bulls Halted– Range Break Imminent

Australian Dollar Forecast: Aussie Bulls Halted– Range Break Imminent

Michael Boutros, Strategist

Australian Dollar Technical Price Outlook: AUD/USD Weekly Trade Levels

  • Australian Dollar technical trade level update - Weekly Chart
  • AUD/USD reverses sharply off technical resistance – range breakout imminent
  • Aussie key support into 7563– key resistance steady at 7836
Advertisement

The Australian Dollar plummeted more than 1.4% against the US Dollar since the start of the week with AUD/USD reversing off technical resistance at the yearly high-close. The pullback puts into focus a critical range of influence and we’re looking for a breakout in the days ahead to offer guidance with the long-side vulnerable below this week’s high. These are the updated targets and invalidation levels that matter on the AUD/USD weekly price chart heading into the close of the year. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie technical setup and more.

Australian Dollar Price Chart – AUD/USD Weekly

Australian Dollar Price Chart - AUD/USD Weekly - Aussie Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview

Notes: In last month’s Australian Dollar Weekly Price Outlook we noted that AUD/USD was testing confluence support around the yearly opening-range lows, “at 7563- a break / close below would be needed to suggest a larger Aussie correction is underway” An April defense of the 2020 trendline fueled a rally of more than 4.7% off the lows the advance faltering yet again this week into confluence resistance at 7836/66- a region defined by the 88.6% retracement of the 2018 decline and the objective 2021 high-close. The battle lines are drawn and the immediate focus is on a breakout of the 7701-7866 range for guidance.

A break / close below channel support here would risk another run on the yearly opening-range lows at 7563 backed by the May 2017 low-week close / 23.6% retracement at 7385-7417 - an area of interest for possible exhaustion IF reached. A topside breach above 7866 would ultimately be needed to mark resumption of the broader uptrend with such a scenario exposing subsequent resistance objective into the yearly high at 8007 and the 2018 high-week close / 2017 high at 8108/25.

Bottom line: The Australian Dollar has once again responded to weekly technical resistance and leaves the bulls vulnerable while below 7866. From a trading standpoint, look for inflection off yearly-open support for guidance – recoveries should be capped by 7800 IF price is indeed heading lower with a close below 7700 needed to suggest a more significant reversal is underway. Review my latest Australian Dollar Price Outlook for a closer look at the near-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

Australian Dollar Trader Sentiment - AUD/USD Price Chart - Aussie Retail Positioning - Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long AUD/USD - the ratio stands at +1.14 (53.21% of traders are long) – weak bearish reading
  • Long positions are 15.60% higher than yesterday and 18.92% higher from last week
  • Short positions are20.90% lower than yesterday and 25.06% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger AUD/USD-bearish contrarian trading bias from a sentiment standpoint.

---

Key Australia / US Data Releases

Key Australia / US Data Releases - AUD/USD Economic Calendar - Aussie Weekly Event Risk

Economic Calendar - latest economic developments and upcoming event risk.

Previous Weekly Technical Charts

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES