In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key levels that matter on the weekly charts for the Australian Dollar. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.
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AUD/USD Weekly Price Chart
Notes: Last week we noted that the Australian Dollar was, “testing BIG weekly support and IF price is going to rebound, this would be a good spot.” Price was unable to close below confluence support at 7480 with Aussie mounting a counter-offensive against the US Dollar early in the week. Note that the momentum profile looks similar to that of the late-2017 rebound and further highlights the risk for topside gains near-term - but stay nimble; the broader outlook remains tilted to the downside while within this descending pitchfork formation.
Bottom line: Look for initial resistance up towards 7636- a breach there would be needed to suggest that a larger reversal is underway / a more significant low is in place. A weekly close below 7480 would mark resumption for the broader downtrend with such a scenario targeting 7327. As noted in today’s webinar, for now, I’m willing to trade the long-side targeting slope resistance.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy