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Australian Dollar Technical Outlook: AUD/USD Threatens Breakout at Yearly Open

Australian Dollar Technical Outlook: AUD/USD Threatens Breakout at Yearly Open

Michael Boutros, Strategist

Australian Dollar Technical Price Outlook: Near-term Trade Levels

  • Australian Dollar technical trade level update – Daily & Intraday Charts
  • AUD/USD rally stalls into yearly open resistance- June opening-range breakout in focus
  • Resistance 7270, 7313/43 (key), 7414 - Support 7109/23 (key), 7067, 6991-7016
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The Australian Dollar is virtually unchanged against the US Dollar this week with AUD/USD coiling just below the yearly open. The focus now shifts to a breakout of the June opening-range for guidance as Aussie tests broader downtrend resistance. 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 Near-term Trade Outlook - AUDUSD Technical Forecast

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

Technical Outlook: The Australian Dollar turned just pips ahead of the 2016 low last month at 6827 with Aussie rallying more than 6.6% over the past four-weeks. The advance stalled in to key resistance last week and the focus remains on reaction into the 7254/70 zone for guidance- a region defined by the 200-day moving average, the 2022 yearly open and the 52-week moving average. Just higher rests the March high-day reversal close / 61.8% Fibonacci retracement at 7314/43- both levels of interest for near-term topside exhaustion IF reached.

Australian Dollar Price Chart – AUD/USD 240min

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

Notes: A closer look at Aussie price action shows AUD/USD trading within the confines of an ascending pitchfork formation extending off the May lows with the rally turning just ahead of the upper parallel into the close last week. Looking for a breakout of this consolidation within the monthly opening-range. Initial support rests with the 38.2% retracement / 100% extension at 7109/23- a break / close below this threshold would be needed to mark resumption of the broader downtrend towards the May open at 7067 and key support at 6991-7016 (look for a larger reaction there IF reached).

Bottom line: The Australian Dollar rally is trading into resistance at the objective yearly open- looking for possible inflection here in the days ahead. From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to 7100 IF price is heading high on this stretch with a close above 7343 needed to suggest a more significant low was registered last month. 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 Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long AUD/USD - the ratio stands at +1.40 (58.39% of traders are long) – typically a weak bearish reading
  • Long positions are5.53% lower than yesterday and 4.62% higher from last week
  • Short positions are0.25% lower than yesterday and 16.91% 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 less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed AUD/USD trading bias from a sentiment standpoint.

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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