Australian Dollar Price Technical Outlook: Short-Term Trading Levels

  • Australian dollar update of the technical level of trading – Daily and intraday charts
  • AUD / USD Weekly opening support defense pulls the aussie back to multi-month highs
  • Resistance 7542/56, 7599 (key) – Short term support 7464/78, 7402 (bullish cancelation)

The Australian dollar jumped more than 4% against the US dollar since the start of the month with a four day rally pushing the AUD / USD back to key technical resistance today – risk of price inflection here. These are the updated targets and invalidation levels that rely on the AUD /USD technical price lists. Review my last Strategy webinar for an in-depth analysis of this Australian configuration and more.

Australian dollar price chart – AUD / USD Daily

Graphic prepared by Michel Boutros, technical strategist; AUD / USD on Tradingview

Technical perspectives: The Australian dollar attempts a fourth consecutive daily advance, with AUD / USD trading just below confluent resistance at 7542/56– a region defined by the extension to 100% of the August rally and the retracement of the annual range to 50%. Note that the test of this threshold goes back to October 21st produced a reversal outside of the day and we are looking again for a possible inflection.

Australian Dollar Price Chart – AUD / USD 120min

Australian Dollar Price Chart - AUD / USD 120min - Australian Business Outlook - Technical Forecast

Remarks: A closer look at the Australian price action shows that the AUD / USD is trading within the limits of an ascending channel formation from September lows with a pullback earlier in the day to defend the short term Support at the lower parallel / weekly opening / September high to 7464/78– the focus remains higher while being above this threshold for the moment. Short term key rresistance stable at 7542/56 and the July high to 7599– look for a bigger reaction there IF hit with a breach / fence above exposing 61.8% Fibonacci rdeletion to 7662 and the annual objective open to 7701. A broader bullish invalidation now extended to 7402/13– a close below this threshold could fuel another episode of accelerated Australian losses.

At the end of the line : The Australian dollar rally is once again approaching a critical resistance pivot – risk of exhaustion here within the uptrend and we are looking for a possible inflection. From a business perspective, look to reduce long exposure / increase protective stops on a stretch down to 7542/56 – losses should be limited to channel support IF the price goes up with a breakout exposing resistance confluent in handle 76 – expect more price reaction there IF reached. Keep in mind that we have US inflation data tomorrow, followed by the RBA and FOMC rate decisions next week – stay nimble. Review my last Australian Weekly Price Outlook in Dollars for a closer look at longer term AUD / USD technical trading levels.

For a full description of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Tranking Sstrategy

Australian Dollar Trader Sentiment – AUD / USD Price Chart

Australian Dollar Traders Sentiment - AUD / USD Price Chart - Australian Retailers Positioning - Technical Outlook

  • A summary of Sentiment of IG customers shows traders are net short AUD / USD – the ratio stands at -1.51 (39.84% of traders are long) – generally a low bullish reading
  • Long positions are 7.94% less than yesterday and 9.82% more than last week
  • Short positions are4.59% more than yesterday and 4.51% more than last week
  • We generally take a contrarian view of crowd sentiment, and the fact that traders are net short suggests that AUD / USD prices may continue to rise. Traders are sharper shorts than yesterday but less clear shorts than last week. The combination of current positioning and recent changes gives us another AUD / USD blended trading bias from a feeling point of view.

Australia / US key data releases

Australia / US Economic Calendar - AUD / USD Key Data Releases - Australian Event Risk - FOMC / RBA

Economic calendarthe latest economic developments and the risks associated with future events.

Active technical configurations

– Written by Michel Boutros, Currency strategist with DailyFX

To follow MIchael on Twitter @MBForex

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