Australian Dollar Technical Price Outlook: Short-Term Trading Levels

  • Australian dollar Trade Level Technical Update – Daily and Intraday Charts
  • AUD/USD bounces off downtrend support – recovery levels are the focus
  • Resistance 7179, 7270 (key), 7313 – Support 7100, 6991-7016 (critical), 6907

The Australian dollar appreciated more than 1.2% against the American dollars since the start of the week with AUD/USD bouncing off downtrend support ahead of today’s Fed rate decision. While the short-term objective gives way to a larger rally, the advance keeps the price within the broader April decline and we are on the lookout for possible high exhaustion in the days ahead. It’s the updated targets and invalidation levels that matter on the AUD/USD technical price charts through the end of the week. Review my last Strategy Webinar for an in-depth analysis of this Australian setup and more.

Australian Dollar Price Chart – Daily AUD/USD

Chart prepared by Michel Boutrostechnical strategist; AUD/USD on Tradingview

Technical outlook: In my last months Australian Dollar Technical Outlook we warned of the risk of exhaustion as AUD/USD probed new yearly highs just above the 76 handle. today with regard to the 61.8% Fibonacci retracement of the 2021 decline to 7610.” Just at the right time, the Aussie made a higher high at 7661 before pulling back with price at the close of the day/week well below resistance. The subsequent 8.25% drop turned the channel off Support at the beginning of the month with an immediate focus on this short-term recovery.

Australian Dollar Price Chart – AUD/USD 120min

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

Remarks: A closer look at Aussie price action shows AUD/USD eyeing a test of the weekly aperture range highs with a newly identified fork formation on the lows possibly in play here. Initial rresistance looked around the Median line near 7179 supported by key resistance at the 2020 yearly open/38.2% retracement at 7270/71– look for a bigger reaction there IF achieved. Ultimately a breach / close above 7313 would be needed to invalidate the broader downtrend. The support now rests along the lower parallel (currently ~7100) with steady critical support at the November/2020 yearly low open at 6991-7016– a breakout / weekly close below this threshold would be necessary to mark the resumption of the trend. Note that such a scenario would likely fuel another bout of accelerated Aussie losses with initial support targets set at the September 2015 low at 6907.

At the end of the line : The Australian Dollar bounced off the downtrend support with an embedded structure giving indications of this near-term recovery. From a trade perspective, losses should be limited to 7100 IF the Aussie heads higher on this rally – watch for a higher exhaustion high ahead of 7270 IF the broader downtrend holds . Staying in the FOMC interest rate decision is on tap today with US Non-Farm Payrolls (NFPs) scheduled for Friday. Expect volatility and stay nimble early in the month. Review my latest Australian Weekly Dollar Price Outlook for a closer look at AUD/USD’s longer-term technical trading levels.

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

Australian Dollar Traders Sentiment – AUD/USD Price Chart

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

  • A summary of IG Customer Sentiment shows traders are net long AUD/USD – the ratio is +2.59 (72.14% of traders are long) – typically a bearish reading
  • Long positions are0.39% less than yesterday and 16.18% more than last week
  • Short positions are17.00% more than yesterday and 3.47% less than last week
  • We generally take a contrarian view of crowd sentiment, and the fact that traders are net buyers suggests that AUD/USD prices may continue lower. Traders are less clear than yesterday but clearer since last week. The combination of current positioning and recent changes gives us another AUD/USD mixed trading bias of a feeling point of view.

Australia/US economic calendar

Australia / US Economic Calendar - AUD/USD Key Data Releases - Aussie Weekly Event Risk - FOMC - NFP - Core Inflation

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

Active technical configurations

– Written by Michel BoutrosTechnical Strategist at DailyFX

To follow MIchael on Twitter @MBForex

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