AUD : Preparing Breakout

(Fri, 15 Jan 2021). The Australian Dollar is fractionally higher against the US Dollar this week after paring early losses with the broader Aussie rally still vulnerable while below a key resistance zone we’ve been tracking for months now. These are the updated targets and invalidation levels that matter on the AUD/USD technical price charts.

AUSTRALIAN DOLLAR PRICE CHART – AUD/USD DAILY

Technical Outlook: In last month’s Australian Dollar Price Outlook noted to be on, “the lookout for a reaction on a stretch towards the upper parallels / Fibonacci resistance for guidance IF reached. Use caution here – the advance is mature and the risk rises for a washout as price approaches pitchfork resistance.” Aussie rallied to a key resistance confluence into the yearly open at the 2018 yearly open / 88.6% Fibonacci retracement of the 2018 decline at 7801/36 (high registered at 7820) before turning lower with the monthly opening-range now set just below.

Monthly open support rests at 7701 backed by 7635 / the median-line – a break / close below would be needed to suggest a larger bull-market correction is underway towards the lower parallels / 2018 May low-day close at 7455. A topside breach of this key resistance zone exposes pitchfork resistance / the March 2018 high at 7916- look for a larger reaction there IF reached.

AUSTRALIAN DOLLAR PRICE CHART – AUD/USD 120MIN

Notes: A closer look at Aussie price action shows AUD/USD trading within the confines of a near-term descending pitchfork formation with price testing the upper parallel in early US trade. Although a breach here would shift the focus higher heading into Friday, key resistance stands just higher into 7801/36- look for inflection there IF reached with a breach likely to fuel an accelerated breakout. Initial support 7732 backed by the weekly opening-range low at 7666 and 7627/35.

Bottom line: The Australian Dollar pulled back from uptrend resistance and the immediate focus is on a breakout of the January opening-range for guidance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into 7801/36 with the broader Aussie advance vulnerable while below this threshold. Ultimately, a larger pullback may offer more favorable opportunities with a breach / close above the monthly range highs needed to mark resumption of the broader uptrend.

DISCLAIMER ON

GFS ASIA TEAM

• 0
• 0
• just now
• 0