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 Rally Stalls into June

Australian Dollar Technical Forecast: AUD/USD Rally Stalls into June

Michael Boutros, Strategist

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
Advertisement

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

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 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

Australian Dollar Trader Sentiment - AUD/USD Price Chart - Aussie Retail Positioning - AUDUSD Technical Forecast
  • 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.

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 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