The Australian Dollar is up practically 4% off the yearly lows with the rally breaking by way of yearly down-trend resistance this week. Here are the up to date targets and invalidation ranges that matter on the AUD/USD charts this week. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and extra.
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AUD/USD Daily Price Chart
Technical Outlook: In my newest AUD/USD Weekly Technical Outlook we highlighted a multi-month resistance slope in worth with our ‘bottom line’ favoring the long-side whereas above the low-day shut at 7087. A breach above confluence resistance at 7239 yesterday has clears the way in which for a bigger advance with our focus greater in Aussie whereas above the trendline confluence round ~7160 (yellow).
Initial every day resistance stands at 7327/36 with a breach / shut above the higher 50-line focusing on a extra important zone at 7446/56 the place the 38.2% retracement of the yearly vary and the May low-day shut converge on pitchfork resistance (be aware the 200-day transferring common simply greater).
AUD/USD 240min Price Chart
Notes: A more in-depth take a look at worth motion reveals AUD/USD buying and selling inside the confines of a slope collection originating off the late-October lows (purple). Initial help rests at again at 7239 with our near-term focus greater whereas above the decrease parallel / weekly open help at 7191.A break beneath 7160 can bewanted to counsel a extra important excessive is in place. Look for a breach above 7336 to gas the following leg focusing on 7374 and key resistance at 7446/56.
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Bottom line: AUD/USD has damaged above multi-month slope resistance and though the broader outlook stays constructive, the advance could also be weak near-term whereas beneath 7327/36. From a buying and selling standpoint, we’ll proceed to favor fading weak point whereas above weekly open help focusing on a breach of the October highs. A break decrease would invalidate the reversal play with such a state of affairs exposing a drop again in direction of the yearly low-day shut at 7086 (note month-to-month open is available in at 7072).
For a whole breakdown of Michael’s buying and selling technique, overview his Foundations of Technical Analysis series on Building a Trading Strategy
AUD/USD Trader Sentiment
- A abstract of IG Client Sentiment reveals merchants are net-long AUD/USD – the ratio stands at +1.03 (50.6% of merchants are lengthy) – impartial studying
- Long positions are 2.0% decrease than yesterday and 18.2% decrease from final week
- Short positions are 10.8% greater than yesterday and 45.8% greater from final week
- We sometimes take a contrarian view to crowd sentiment, and the actual fact merchants are net-long suggests AUD/USD costs might proceed to fall. Yet merchants are much less net-long than yesterday and in contrast with final week and the recent modifications in sentiment warn that the present AUD/USD worth development might quickly reverse greater regardless of the actual fact merchants stay net-long.
See how shifts in AUD/USD retail positioning are impacting trend- Learn more about sentiment!
Relevant AUD/USD Data Releases
Active Trade Setups
– Written by Michael Boutros, Currency Strategist with DailyFX