AUD/USD Breakdown to Turn or Burn on Aussie Employment, US CPI

Talking Points

  • AUDUSD during support- broader concentration is reduce streamer into pivotal AU, US data
  • Updated targets cancellation levels
  • Looking for trade ideas? Review DailyFX’s 2016 4Q Projections

AUD/USD120min

AUDUSD 120min Chart

Technical Outlook: Aussie has continued to trade within a proportions of a forward median-line arrangement dating behind to a Oct high with a decrease violation next pivotal long-term constructional support fluctuating off a Jan low in overnight trade.

The sell rate responded to connection support currently during 7462 – a turn tangible by a 50% retracement of a May allege and a reduce parallel. Heading into tonight’s Australia practice news and successive US CPI release, a risk stays reduce sub-7558 with a mangle reduce targeting successive support objectives during 7420 and a 61.8% retracement during 7387.

A crack above a median-line / monthly open during 7608 would be indispensable to change a broader concentration aloft in AUDUSD. From a trade standpoint, while we could see some upside off this support zone, we would be looking to blur strength / short-entries on a convene into constructional insurgency nearby a weekly open during 7525/44.

AUDUSD SSI

  • A outline of a DailyFX Speculative Sentiment Index (SSI) shows traders are net prolonged AUD/USD- a allotment stands during +1.93 (66% of traders are long)- bearish reading
  • Long positions are 14.7% aloft than yesterday and 72.1% above levels seen final week.
  • Short positions are 8.4% reduce than yesterday and 14% next levels seen final week.
  • Open seductiveness is 5.6% aloft than yesterday and 1.1% above a monthly average.
  • The stream boost in long-positioning on building open seductiveness suggests that sell crowds are attempting blur this decline, withdrawal a risk for serve waste near-term. That said, it’s critical to keep in mind a final time SSI extended into these levels was behind in behind in Sep as a sell rate bottomed – (that low still holds). Look for an boost in short-exposure as cost approaches support for indications that a decrease might be reaching near-term exhaustion.

Relevant Data Releases

AUDUSD Economic Docket

Other Setups in Play:

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—Written by Michael Boutros, Currency Strategist with DailyFX

Join Michael for Live Weekly Trading Webinars on Mondays on DailyFX during 13:30 GMT (8:30ET)

Follow Michaelon Twitter @MBForex hit him during mboutros@dailyfx.com or Click Here to be combined to his email placement list.

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