AUD/USD Price Rally Vulnerable Ahead Of FOMC, NFP

AUD/USD DAILY PRICE CHART

Technical Outlook: Aussie has rallied for the past seven consecutive weeks prices rallying nearly 8% off the December lows. Earlier in the month we noted that, “A breach above the high-day close at 8054 targets channel resistance around ~8100 backed by the 2017 high at 8125 and the 100% extension at 8153. Bottom line: the immediate advance is vulnerable but ultimately a pullback should offer more favorable long-entries.”

Prices stalled briefly before rallying into the 2017 high / channel resistance at 8125. The immediate advance is at risk heading into key resistance at 8153/63 where the late-2015 swing highs converges on the 100% extension of the 2016 advance, with basic trendline resistance off the 2013 highs just higher at around ~8180– both areas of interest for possible near-term exhaustion / short-entries.

AUD/USD 240MIN PRICE CHART

Notes: A closer look at price action sees the Australian dollar trading within the confines of a well-defined ascending channel formation extending off the December lows. Price rebounded off channel resistance into the close last week and a clear weekly opening-range is now in focus between 8054–8125.

Bottom line: while the broader outlook remains weighted to the topside, the advance is vulnerable heading into confluence resistance just higher. From a trading standpoint, I’d favor fading strength into structural resistance with a break below 8026 needed to validate that more significant near-term high is in place- such a scenario targets subsequent support objectives at 7956 and 7886/98. A breach above structural resistance would keep the long-bias in play targeting the 50% retracement at 7515.

AUD/USD IG CLIENT SENTIMENT