Bearish bias, no open position, waiting for pullback.
The Australian Dollar is under structural pressure: the yield advantage of Australian rates over US rates is compressing rapidly, the US PPI came in well above expectations (1.1% vs 0.7% forecast) and the US Dollar maintains a dominant daily uptrend. Large speculative funds reduced their long exposure on AUD by over 23,600 contracts in a single week, a clear sign of growing disengagement. In the short term a technical bounce is underway, but it is happening on very low volume: there are no real institutional buyers supporting the move.
The current price at 0.7032 sits just 32 pips above a significant institutional floor at 0.7000, where nearly 1,800 July PUT contracts are clustered. Selling here means selling directly above a wall of buyers: the risk/reward is insufficient.
The strategy is to wait for the ongoing bounce to carry price toward the institutional resistance at 0.7050/0.7055, a confluence zone between July and June CALL options and recent technical highs. Only if price is rejected from that zone is a Short entry considered, with stop at 0.7105 and target at 0.6900, for a risk/reward ratio of 1:2.73. If price breaks above 0.7055 with strength, no entry. If price breaks directly below 0.7000, do not chase: wait for a retest of the level before reassessing.
Key calendar risks this week: RBA on June 16 and FOMC on June 17 can generate sharp moves on open swing positions.
The Australian Dollar is under structural pressure: the yield advantage of Australian rates over US rates is compressing rapidly, the US PPI came in well above expectations (1.1% vs 0.7% forecast) and the US Dollar maintains a dominant daily uptrend. Large speculative funds reduced their long exposure on AUD by over 23,600 contracts in a single week, a clear sign of growing disengagement. In the short term a technical bounce is underway, but it is happening on very low volume: there are no real institutional buyers supporting the move.
The current price at 0.7032 sits just 32 pips above a significant institutional floor at 0.7000, where nearly 1,800 July PUT contracts are clustered. Selling here means selling directly above a wall of buyers: the risk/reward is insufficient.
The strategy is to wait for the ongoing bounce to carry price toward the institutional resistance at 0.7050/0.7055, a confluence zone between July and June CALL options and recent technical highs. Only if price is rejected from that zone is a Short entry considered, with stop at 0.7105 and target at 0.6900, for a risk/reward ratio of 1:2.73. If price breaks above 0.7055 with strength, no entry. If price breaks directly below 0.7000, do not chase: wait for a retest of the level before reassessing.
Key calendar risks this week: RBA on June 16 and FOMC on June 17 can generate sharp moves on open swing positions.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.