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)
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
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
- 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.
| Change in | Longs | Shorts | OI |
| Daily | 1% | 6% | 2% |
| Weekly | 29% | -22% | 15% |
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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
