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 Technical Forecast: AUD/USD Breakout Levels

Australian Dollar Technical Forecast: AUD/USD Breakout Levels

Michael Boutros, Strategist

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

  • Australian Dollar technical trade level update - Weekly Chart
  • AUD/USD carves monthly opening-range around yearly open- breakout pending
  • Resistance 7270, 7380-7413, 7531 (key) - Support 7115, 6991-7016 (critical)
Advertisement

The Australian Dollar is attempting to mark a second consecutive weekly advance against the US Dollar this week with AUD/USD carving out a well defined monthly opening-range around the yearly open. The December recovery may be vulnerable in the days ahead and we’re looking for a breakout to offer guidance on our medium-term direction bias. These are the updated targets and invalidation levels that matter on the AUD/USD weekly price chart. 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: The Australian Dollar rebounded off key support in December at the November 2020 low / 2020 yearly open at 6991-7016 with Aussie rallying nearly 4% into the close of the year. Since then, AUD/USD has been trading within a 2.59% range with the January opening-range preserved around the yearly open- the focus is on a breakout for guidance in the days ahead.

Yearly open resistance stands at 7270 with a break of the highs exposing the 38.2% Fibonacci retracement of the 2021 yearly range / 100% extension of the December advance at 7380-7413 and the 52-week moving average at ~7470. Ultimately a breach / close above the 7531 pivot zone is needed to validate a breakout of the 2021 downtrend. Initial support is rests with the 61.8% retracement of the December advance at 7115 – weakness beyond this threshold is would once again expose key support at 6991-7016 (look for a larger reaction there IF reached).

Bottom line: The Australian Dollar recovery may be vulnerable while below the yearly open here. From a trading standpoint, the focus is on a break of the January range for guidance- losses should be limited to 7115 IF price is heading higher.I’ll publish an updated Australian Dollar Price Outlook once we get further clarity on 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 +1.60 (61.60% of traders are long) – typically bearish reading
  • Long positions are 5.85% higher than yesterday and 9.63% higher from last week
  • Short positions are11.88% lower than yesterday and 24.43% 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