AUD/USD Into Resistance – 7500 in Focus

AUD/USD Daily

 

Technical Outlook: AUS/USD is testing confluence resistance into the start of the week just under the 7500. This region is defined by the 38.2% retracement of the March decline and the upper median-line parallel of the operative descending pitchfork. We discussed this setup at length in today’s Strategy Webinar and for now, the immediate topside bias is at risk while below this threshold. Interim support rests with the overnight lows with a close below 7385 needed to put resumption of the downtrend back on the table.

AUD/USD 240min

 

Notes: A closer look at price action highlights the Aussie’s approach into this key resistance confluence today in New York trade- Look for a reaction here with the immediate focus on the 7429-7490 range to start the week. A topside breach targets 7539/43 (note the 100 & 200 Daily moving averages) backed by the 61.8% retracement at 7589.

Interim support & immediate bullish invalidation rests at 7429 with a break below 7382/85 needed to re-assert the short-side. A third of the daily average true range (ATR) yields profit targets of 19-23pips per scalp. Economic data is rather light until late in the session so look for broader market sentiment to drive price action in this pair.

 

• A summary of IG Client Sentiment shows traders are net-short AUDUSD- the ratio stands at -1.04 (48.9% of traders are long)- weak bullish reading
• The percentage of traders net-long is now its lowest since May 1st
• Long positions are 2.5% higher than yesterday but 15.7% lower from last week
• Short positions are 11.2% higher than yesterday and 14.7% higher from last week
• The recent build in short-exposure keeps the immediate long-bias in focus into the start of the week. That said, from a trading standpoint, the focus is on structural resistance heading into the 75-handle- with a breach there needed to validate a more meaningful breakout in the pair.

Relevant Data Releases