AUD/USD Price Rally Vulnerable- Pullback to Offer Opportunity

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AUD/USD Daily Chart

AUD/USD Price Chart - Daily Timeframe

Technical Outlook: AUD/USD is figure out a well-defined monthly opening operation only next a pivotal near-term insurgency operation during 7887/98– this segment is tangible by a 61.8% retracement of a Sep decrease a Oct pitch highs and converges on simple slope insurgency fluctuating off a 2017 high.

The evident allege is during risk while next this threshold near-term and as remarkable in my Weekly Technical Perspective, “From a trade standpoint, I’m looking reduce into a monthly open though eventually a incomparable shock would offer auspicious long-entries within this proportions of this broader uptrend.

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AUD/USD 240min Chart

AUD/USD Price Chart - 240min Timeframe

Notes: A closer demeanour during cost movement sees Aussie branch only forward of remarkable insurgency with a pullback now contrast halt support here during 7800/13. A mangle next this levels shifts a concentration towards connection slope support during ~7750s corroborated by a 2016 high-day tighten during 7735– both levels of seductiveness for probable depletion / long-entries IF reached.

A topside crack of this arrangement would expected fuel accelerated gains for a span with such a unfolding targeting successive insurgency objectives during 7991 and a 2017 high-day tighten during 8054. Bottom line: a evident concentration is on a mangle of a 7800-7898 operation for superintendence with a pierce reduce to eventually offer some-more auspicious long-entries. Note that a mercantile calendar is rather still until a tail finish of a week with a U.S. Consumer Price Index (CPI) and Retail Sales on tap.

For a finish relapse of Michael’s trade strategy, examination his Foundations of Technical Analysis mini-series

AUD/USD IG Client Sentiment

  • A outline of IG Client Sentimentshows traders are net-short AUDUSD- a ratio stands during -2.05 (67.8% of traders are long) – bearish reading
  • Retail has remained net-short given Dec 19; cost has changed 2.3% aloft given then
  • The commission of traders net-long is now a lowest given Sep 07
  • Long positions are 8.0% reduce than yesterday and 14.2% reduce from final week
  • Short positions are 5.1% aloft than yesterday and 21.0% aloft from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests AUDUSD prices might continue to rise. Traders are serve net-short than yesterday and final week, and a multiple of stream positioning and new changes gives us a stronger AUDUSD-bullish contrarian trade disposition from a view standpoint.

See how shifts in AUD/USD sell positioning are impacting trend- Click here to learn some-more about sentiment!

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– Written by Michael Boutros, Currency Strategist with DailyFX

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