The Australian Dollar is down more-than 0.6% against US Dollar this week with Aussie rebounding off key lateral support late in the week. These are the updated targets and invalidation levels that matter on the AUD/USD weekly chart. Review this week’s Strategy Webinar for an in-depth breakdown of this oil price setup and more.
Australian Dollar Chart – AUD/USD Weekly
Notes:In my last Australian Dollar Weekly Price Outlook we noted that AUD/USD was, “testing yearly downtrend resistance here and leaves the immediate Aussie advance vulnerable sub-6895.” Aussie registered a high at the 61.8% retracement of the July decline at 6928 in the following days before reversing sharply with the decline testing support this week at the yearly low-week close at 6768.
Initial resistance now stands back at the 2016 low-week close / November weekly reversal close at 6855/56 – the immediate focus is on a break of the 6768 – 6856 range for guidance with the short-bias at risk while within this zone. A topside breach / close above exposes subsequent topside resistance objectives at 6927 backed by the March low at 7003.
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Bottom line: The Australian Dollar is pulling back from a failed breakout of the 2018 resistance slope with this week’s low registering at technical support. From a trading standpoint, the immediate focus is on a break of the 6768-6856 zone with a breach / close above needed to suggest a more significant low is in place. Looking to fade downside exhaustion within this zone. Weakness / a close below 6768 would ultimately risk resumption of the broader downtrend. Review my latest Australian Dollar Price Outlook for a closer look at the near-term AUD/USD technical trading levels.
Australian Dollar Trader Sentiment – AUD/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long AUD/USD – the ratio stands at +1.70 (63.01% of traders are long) – bearish reading
- Long positions are 4.66% higher than yesterday and 20.28% higher from last week
- Short positions are1.44% lower than yesterday and 25.02% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger AUD/USD-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in AUD/USD retail positioning are impacting trend- Learn more about sentiment!
Previous Weekly Technical Charts
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— Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex