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Australian Dollar Technical Outlook: Aussie Exhaustion Risk

Australian Dollar Technical Outlook: Aussie Exhaustion Risk

Michael Boutros, Strategist

Australian Dollar Technical Price Outlook: Near-term Trade Levels

  • Australian Dollar technical trade level update – Daily & Intraday Charts
  • AUD/USD breakout at risk for near-term exhaustion within broader uptrend
  • Resistance 7610, 7701(critical), 7787-7800 - Support 7543, 7497, 7456 (key)
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The Australian Dollar surged 1.7% against the US Dollar since the start of the week with AUD/USD now probing a key technical confluence zone. The immediate rally may be vulnerable and a correction within the broader uptrend may offer more favorable opportunities. These are the updated targets and invalidation levels that matter on the AUD/USD technical price charts into the close of the week. Review my latest Strategy Webinar for an in-depth breakdown of this Aussie setup and more.

Australian Dollar Price Chart – AUD/USD Daily

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

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

Technical Outlook: The Australian Dollar ripped through downtrend resistance on March 18th with Aussie rallying more than 3.2% off that mark. A newly identified upslope has offered clear guidance on this advance with the immediate focus on today’s close with respect to the 61.8% Fibonacci retracement of the 2021 decline at 7610. Note that a major resistance confluence can be seen just higher at the 20201 yearly open at 7700. Initial support now rests at the median-line / October high-day close at 7543 with broader bullish invalidation raised to the lower parallel / September 2020 high around 7413.

Australian Dollar Price Chart – AUD/USD 240min

Australian Dollar Price Chart - AUD/USD 240min - Aussie Trade Outlook - AUDUSD Technical Forecast

Notes: A closer look at Aussie price action offers a clearer view on today’s breach above confluence resistance at 7600/10 with AUD/USD registering an intra-day high at 7661. Failure to close above this threshold would increase the risk of a near-term exhaustion pullback in Aussie.

Bottom line: The Australian Dollar rally is now probing a critical resistance confluence and the immediate focus is on whether price can stabilize above this the 76-handle- where on the lookout for an exhaustion pullback within the broader uptrend. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to the weekly open at 7497 IF Aussie is heading higher on this stretch. Ultimately, a larger pullback here may offer more favorable opportunities closer to trend support. 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

Australian Dollar Trader Sentiment - AUD/USD Price Chart - Aussie Retail Positioning - AUDUSD Trade Outook
  • A summary of IG Client Sentiment shows traders are net-short AUD/USD - the ratio stands at -2.09 (32.34% of traders are long) – typically a bullish reading
  • Long positions are3.18% higher than yesterday and 8.79% higher from last week
  • Short positions are1.52% lower than yesterday and 2.22% 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. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current AUD/USD price trend may soon reverse lower despite the fact traders remain net-short.

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Australia / US Economic Calendar

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

Economic Calendar - latest economic developments and upcoming event risk.

Active Technical Setups

- Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

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

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