AUD/USD Price Analysis: Pending Consolidation Break to Fuel Next Leg

The Australian Dollar has continued to trade within a 2% operation (150pips) given a start of May trade with cost environment a well-defined monthly opening-range only above weekly support. While a broader risk stays weighted to a downside, a evident disposition stays exposed near-term while above this week’s lows. Here are a levels that matter for AUD/USD streamer into a tighten of a week.

AUD/USD Daily Price Chart

AUD/USD Price Chart - Daily Timeframe

Technical Outlook: In final month’s Weekly Technical Perspective we highlighted that a mangle of support in a Aussie left the, “near-term risk reduce in cost while next 7635. Subsequent support objectives are eye during a median-line / 50% retracement of a 2016 allege during 7480-7500.” Price is trade in this operation now after induction a low during 7412 final week. Note that AUD/USD posted a weekly Doji off this support section and a evident downside disposition stays exposed while above 7480 on a weekly tighten basis.

The daily draft is a bit disorderly here though a concentration is on a mangle of a well-defined May opening-range to offer guidance. Initial insurgency is eyed during 7567 with bearish cancellation solid during 7635. A mangle reduce from here targets 7379 corroborated by a 61.8% retracement of a 2016 allege during 7327.

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AUD/USD 240min Price Chart

AUD/USD Price Chart - 240min Timeframe

Notes: A closer demeanour during cost movement sees a Australian dollar consolidating only above a 7480 support zone- demeanour for a mangle of this pattern. A topside crack risks a improvement towards 7602 or even 7637 – both areas of seductiveness for probable depletion IF reached.

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Bottom line: Aussie is contrast BIG weekly support here and IF cost is going to rebound, this would be a good spot. From a trade standpoint, if you’re short, demeanour to pierce in protecting stops only above this formation. A topside crack would offer opportunities to play a long-side targeting 7600 though be nimble- a broader opinion still stays slanted to a downside after violation next slope support final month.

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AUD/USD IG Client Positioning

AUD/USD Client Positioning

  • A outline of IG Client Sentimentshows traders are net-long AUDUSD- a ratio stands during +2.14 (68.1% of traders are long) –bearishreading
  • Retail has remained net-long given April 19th; cost has changed 3.6% reduce given then
  • Long positions are 5.6% aloft than yesterday and 13.5% aloft from final week
  • Short positions are 0.5% aloft than yesterday and 1.3% reduce from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests AUDUSD prices might continue to fall. Traders are serve net-long than yesterday and final week, and a multiple of stream positioning and new changes gives us a stronger AUDUSD-bearish contrarian trade bias from a view standpoint.

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Relevant Data Releases

AUD/USD Economic Calendar

Other Setups in Play

– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or hit him during mboutros@dailyfx.com

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