Australian Dollar Technical Price Outlook: AUD/USD Weekly Trade Levels
- Australian Dollar technical trade level update – Weekly Chart
- AUD/USD rally enters fourth week – risk for price inflection into key technical confluence
- Aussie key resistance into 7531/42, Support 7385, 7328- bullish invalidation at 7226
The Australian Dollar surged more than 4.4% against the US Dollar since the September lows with AUD/USD ripping to fresh three-month highs today in US trade. The breakout keeps medium-term focus higher in Aussie in the days ahead as the bulls eye a key technical confluence just higher. These are the updated targets and invalidation levels that matter on the AUD/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie technical setup and more.
Australian Dollar Price Chart – AUD/USD Weekly
Notes: In last month’s Australian Dollar Weekly Price Outlook we noted that the Aussie, “pullback is at a major pivot zone – looking for inflection off this threshold. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops – on the lookout for possible downside exhaustion ahead of 7248 IF price is still heading higher.” AUD/USD registered an intraweek low at 7169 but held this critical zone into the end of the week with the low-week close registering at 7266- a textbook exhaustion signal.
The subsequent rally is attempting to breach confluent resistance today at the 38.2% Fibonacci retracement of the yearly range / medina-line of the descending pitchfork we’ve been tracking off the yearly highs at 7450– watch the weekly close with respect to this threshold. The next major resistance objective is eyed at the March swing lows / 52-week moving average / 100% extension at 7531/42– area of interest for possible topside exhaustion IF reached. Weekly support rests back at the May 2017 low-week close at 7385 backed by 7328 with a break below the objective October open at 7226 ultimately needed to shift the focus back to the downside.
Bottom line: The Australian Dollar rally in its fourth consecutive week with a breakout above confluent resistance today keeping the focus on longer-term downtrend resistance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into key resistance at 7531/42- look for possible inflection there IF reached. Respect the weekly close- failure to hold 7450 could fuel a near-term pullback and losses should be limited to 7385 to keep the immediate long-bias viable with a topside breach exposing downtrend resistance, (currently near ~7620s). I’ll publish an updated Australian Dollar Price Outlook once we get further clarity on the near-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
- A summary of IG Client Sentiment shows traders are net-short AUD/USD – the ratio stands at -1.51 (39.89% of traders are long) – neutral reading
- Long positions are 10.99% lower than yesterday and 18.38% lower from last week
- Short positions are5.91% higher than yesterday and 13.50% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUD/USD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger AUD/USD-bullish contrarian trading bias from a sentiment standpoint.
Key Australia / US Data Releases
Economic Calendar – latest economic developments and upcoming event risk.
Previous Weekly Technical Charts
— Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex