The Australian Dollar has rallied practically 2% off the recent yearly lows registered final week with the advance taking worth right into a important pivot zone we’ve been monitoring for months now at 7327/363. Here are the up to date targets and invalidation ranges that matter on the AUD/USD charts into the open of the week. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and extra.
AUD/USD Daily Price Chart
Technical Outlook: Earlier this month we highlighted a key focus range in AUD/USD between 7327-7505; worth broke the underside of this zone with conviction on August 10th with the decline taking out help targets at 7298 and 7230 earlier than turning simply pips from the 2017 open at 7200.
The Aussie reversal is now focusing on former key help, now resistance, at 7327/36 the place the July low-day shut and 61.8% retracement of the 2016 advance converge on former slope help. This is the primary main resistance hurdle for this rebound and a breach / shut above could be wanted to recommend a extra vital low is in place.
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AUD/USD 240min Price Chart
Notes: A better have a look at Aussie worth motion sees the pair opening the week just under this key resistance threshold. Interim help rests at 7298 backed by 7253 with our near-term bullish invalidation stage on the yearly low-day shut at 7239. A topside breach right here targets 7376 backed by the May lows / August open at 7412/24(be aware July slope resistance simply increased).
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Bottom line: Looking for a response on a stretch into the 7327/36 pivot zone with a breach / shut above wanted to gasoline the following leg increased in Aussie. From a buying and selling standpoint, I’m searching for near-term exhaustion on a transfer increased right here however in the end, a bigger pullback could provide higher entries for the restoration increased.
For an entire 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 +1.65 (62.3% of merchants are lengthy) – bearishstudying
- Traders have remained net-long since June 5th; worth has moved 3.5% decrease since then
- Long positions are2.7% increased than yesterday and 9.0% decrease from final week
- Short positions are 5.6% increased than yesterday and 18.5% increased from final week
- We sometimes take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests Aussie costs could proceed to fall. Yet merchants are much less net-long than yesterday and in contrast with final week. Recent modifications in sentiment warn that the present AUD/USD worth development could quickly reverse increased regardless of the very fact merchants stay net-long.
See how shifts in AUD/USD retail positioning are impacting trend- Learn more about sentiment!
Relevant AUD/USD Economic Data Releases
Other Trade Setups in Play
– Written by Michael Boutros, Currency Strategist with DailyFX