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 Correction Levels

Australian Dollar Technical Forecast: AUD/USD Correction Levels

Michael Boutros, Strategist

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

  • Australian Dollar technical trade level update - Weekly Chart
  • AUD/USD plunges 2% off yearly / weekly high- threatens deeper correction within the uptrend
  • Aussie resistance 7531, 7610 (key), 7705- Support 7385/96 (critical), 7235/70
Advertisement

The Australian Dollar plunged more than 2% off the weekly highs with AUD/USD reversing sharply from key technical resistance levels. The reversal threatens a deeper correction in the days ahead and a pullback may offer more favorable opportunities closer to trend support. 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 - AUDUSD Technical Forecast

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

Notes: In last month’s AUD/USD Technical Forecast we note that, “A six-week recovery in the Australian Dollar has reversed off long-term downtrend resistance. The immediate focus is on this turn lower with an exhaustion-low ahead of 7149 needed to keep the recovery viable.” That recovery was short-lived with price registering a low at 7165 before reversing sharply higher. The advance ripped through resistance targets at 7531 and the 61.8% Fibonacci retracement of the 2021 decline (7610) before reversing sharply lower- Is a near-term high in place?

Key support rests at a major technical confluence around 7385/96- a region now defined by the May 2017 low-week close, the 52-week moving average and the 38.2% retracement of the year-to-date range. A break below this threshold would threaten an accelerated decline towards the 61.8% retracement / objective yearly open at 7232/70. Weekly resistance objectives are unchanged at 7531, 7610 and the 2021 high-week close at 7705- look for a larger reaction there IF reached.

Bottom line: The Australian Dollar breakout may be vulnerable to near-term exhaustion here and we’re on the lookout for an exhaustion low closer to trend support. From a trading standpoint, losses should be limited to 7385 for the long-bias to remain viable with a weekly close above 7610 needed to mark resumption of the yearly uptrend. 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 - AUDUSD Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-short AUD/USD - the ratio stands at -1.18 (45.79% of traders are long) – typically neutral reading
  • Long positions are 16.49% higher than yesterday and 29.44% higher from last week
  • Short positions are16.71% lower than yesterday and 23.87% lower 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.

---

Australia / US Economic Calendar

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

Economic Calendar - latest economic developments and upcoming event risk.

Previous Weekly Technical Charts

--- 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.

DISCLOSURES