Australian Dollar Outlook: Aussie Rallies to Key Zone- AUD/USD Levels

2021-10-28 16:30:00

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Australian Dollar Technical Price Outlook: Near-term Trade Levels
Australian Dollar Price Chart – AUD/USD Daily
Australian Dollar Price Chart – AUD/USD 120min
Australian Dollar Trader Sentiment – AUD/USD Price Chart
Key Australia / US Data Releases
Active Technical Setups

Australian Dollar Technical Price Outlook: Near-term Trade Levels

Australian Dollar technical trade level update – Daily & Intraday Charts
AUD/USD defense of weekly-open support takes Aussie back towards multi-month highs
Resistance 7542/56, 7599(key) - Near-term support 7464/78, 7402 (bullish invalidation)

The Australian Dollar surged more than 4% against the US Dollar month-to-date with a four-day rally taking AUD/USD back towards key technical resistance today- risk for price inflection up here. 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: The Australian Dollar is attempting a fourth consecutive daily advance with AUD/USD trading just below confluent resistance at 7542/56- a region defined by the 100% extension of the August rally and the 50% retracement of the yearly range. Note that test of this threshold back on October 21st yielded an outside-day reversal and we’re looking for possible inflection once again.

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 channel formation off the September lows with a pullback earlier today defending near-term support at the lower parallel / weekly open / September high at 7464/78- the focus remains higher while above this threshold for now. Key near-term resistance steady at 7542/56 and the July high at 7599- look for a larger reaction there IF reached with a breach/ close above exposing the 61.8% Fibonacci retracement at 7662 and the objective yearly open at 7701. Broader bullish invalidation now raised to 7402/13- a close below this threshold could fuel another bout of accelerated Aussie losses.

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Bottom line: The Australian Dollar rally is once again approaching a critical resistance pivot – risk for exhaustion here within the uptrend and we’re looking for possible inflection. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into 7542/56- losses should limited to channel support IF price is heading higher with a breakout exposing confluent resistance into the 76-handle – expect a larger reaction in price there IF reached. Keep in mind we have US inflation data tomorrow followed by the RBA and FOMC rate decisions next week- stay nimble. 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 -1.51 (39.84% of traders are long) – typically a weak bullish reading
Long positions are 7.94% lower than yesterday and 9.82% higher from last week
Short positions are4.59% higher than yesterday and 4.51% 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. Trader 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.

AUD/USD Mixed

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