(MENAFN- DailyFX) Aussiecarving weekly opening-range just above 2016 low- updatedAUD/USDtrade levels Check out our 2019 projections in ourFree DailyFX USD Trading Forecasts Join Michael for Live Weekly Strategy Webinars onMondays at 12:30GMT TheAustralian Dollaris down more than 3.5% against theUS Dollaryear-to-date and more than 5.7% off the yearly highs with the decline now approaching the 2016 lows. These are the updated targets and invalidation levels that matter on the AUD/USD charts this week.Review this week's Strategy Webinarfor an in-depth breakdown of this setup and more.
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AUD/USD Daily Price Chart
Technical Outlook: In my latestAUD/USD Weekly Price Outlookwe noted that Aussie was approaching key support, 'at 7020/42 – a region defined by the yearly open, the 50%retracementof the 2019 range and the yearly close-low. A break / close below is needed to mark resumption of the broader down trend exposing the 2016 low / low-week close at 6827/55.' Note that the 25% line of the broader 2017 / 2018 descendingpitchforkalso converges on this region and halted the decline last week. Price closed just one pip of the low on Friday at 6866 with Aussie testing this low again today.
Initial resistance stands at the median-line backed by the monthlyopening-rangelow at 6963- a breach there would expose the yearly low-day close at 7005 with broader bearish invalidation set to the yearly / monthly open at 7042/47. Initial support objectives steady at 6855 and the 2016 low at 6827- look for a bigger reaction there IF reached.
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AUD/USD 120min Price Chart
Notes: A closer look at price action showsAussietrading within the confines of anear-term descending pitchfork formation off the late-April high. Price has now filled the Sunday gap with the weekly opening-range set just above the yearly low at 6866. A downside break of this zone exposes 6855 backed by the lower parallel / 6827. Weekly open resistance stands at 6911 with a breach above the range high / upper parallel at ~6934 needed to suggest a larger correction is underway.
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Bottom line: AUD/USD is approaching a key longer-term slope / lateral support and leaves the immediate short-bias vulnerable heading into the 2016 lows. From a trading standpoint, look to reduce short-exposure / lower protective stops on a move lower. We'll be on the lookout for possible downside exhaustion on a test of the lower parallels with a breach above the weekly opening-range high needed to shift the near-term focus higher in theAustralian Dollar .
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AUD/USD Trader Sentiment
A summary ofIG Client Sentimentshows traders are net-long AUD/USD- the ratio stands at +3.31 (76.8% of traders are long) – bearishreading Traders have remained net-long since April 18th; price has moved 4.2% lower since then Long positions are0.4% lower than yesterday and 0.6% higher from last week Short positions are2.6% lower than yesterday and 6.3% higher from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Aussie 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 strongerAUD/USD -bearish contrarian trading bias from a sentiment standpoint. See how shifts in AUD/USD retail positioning are impacting trend-Learn more about sentiment!
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Relevant Australia / US Economic Data Releases
Economic Calendar- latest economic developments and upcoming event risk. Learn more about how weTrade the News in our Free Guide !
Active Trade Setups Oil Price Outlook: Crude Decline Testing Critical Trend Support Canadian Dollar Price Outlook: USD/CAD at Weekly High as Loonie Dives Gold Price Outlook: XAU Testing Yearly Lows – Shorts Vulnerable Sterling Price Outlook: GBP/USD Bulls Buckle Up for Fed, BoE, NFP Euro Price Outlook: EUR/USD Snap Back- Trade or Fade? - Written byMichael Boutros , Currency Strategist with DailyFX
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