Australian Dollar Technical Price Outlook: AUD/USD Weekly Trade Levels
- Australian Dollar technical trade level update - Weekly Chart
- AUD/USD rips 5.8% off yearly low- rally testing downtrend resistance into June open
- Aussie resistance 7270/88(key), 7343/85, 7531/57- Support 6991-7016s (key), 6936, 6800
The Australian Dollar surged more than 5.8% off the yearly low with AUD/USD testing downtrend resistance early in the month. The rally may be vulnerable here but losses should be limited IF Aussie is making a larger push higher. These are the updated targets and invalidation levels that matter on the AUD/USD weekly price charts into the June open. 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: In last month’s Australian Dollar Technical Forecast we warned that AUD/USD had, “plummeted into a critical support pivot and the immediate focus is on a reaction off this mark. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – rallies should be limited to the median-line IF price is heading lower on this stretch…” The zone in question was 6991-7016 – a region defined by the November 2020 swing low, the objective 2020 yearly open, the 2021 lows and the January low-week close. Aussie plunged through this threshold before rebounding off the lower parallel with the rally faltering today back at the median-line. Was that a false break of the yearly opening-range lows?
Weekly support into the start of the month now back at 6991-7016 backed by the yearly low-week close at 6936- a break / close below this threshold is now needed to mark resumption of the broader downtrend towards the lower parallel (currently near ~6800) and a more significant technical confluence at the 2008 low-week close / 2019 low at 6660/70. Weekly resistance now stands at the objective yearly open / 38.2% Fibonacci retracement of the 2021 decline / 52-week moving average at 7270/88. Ultimately a breach / weekly close above the 61.8% retracement / 2017 May low-week close at 7343/85 would be needed to suggest a more significant low was registered last month.
Bottom line: A rebound off downtrend support takes the Australian Dollar into downtrend resistance early in the month- risk for topside exhaustion into 7288. From a trading standpoint, a good region to reduce portions of long-exposure / raise protective stops- losses should be limited to the 70-handle IF price is heading higher on this stretch. I’ll publish an updated Australian Dollar Price Outlook once we get further clarity on the near-term AUD/USD technical trade levels.Stay tuned!
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 +1.16 (53.77% of traders are long) – typically neutral reading
- Long positions are 3.27% lower than yesterday and 25.39% lower from last week
- Short positions are0.92% lower than yesterday and 31.51% higher 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. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current AUD/USD price trend may soon reverse higher despite the fact traders remain net-long.
| Change in | Longs | Shorts | OI |
| Daily | -4% | 18% | -1% |
| Weekly | 49% | -56% | 3% |
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--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
