Australian Dollar Forecast: AUD/USD Breakout at Risk into Fed

Australian Technical Forecast: AUD/USD Weekly Trade Levels

AUD/USD breakout extends to fresh yearly highs- attempting to mark four-week advance
Aussie rally may be vulnerable into uptrend resistance just higher– Fed on tap
Resistance 6671, 6723 (key), 6795-6811- Support 6550/76 (key), 6469, 6440

A breakout in the Australian Dollar is attempting to mark a fourth consecutive weekly advance with the AUD/USD testing initial resistance this week. The focus now shifts to the Federal Reserve interest rate decision tomorrow and while the border outlook remains constructive, the advance may be vulnerable in the days ahead as price approaches uptrend resistance. Battle lines drawn on the AUD/USD weekly technical chart ahead of FOMC.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie setup and more. Join live on Monday’s at 8:30am EST.

Australian Dollar Price Chart – AUD/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView

Technical Outlook: In last month’s Australian Dollar Forecast we noted that AUD/USD was, “trading just below multi-year downtrend resistance with the immediate focus still on a breakout of the July 28^th weekly candle for guidance.” The range held into the September open with last week’s rally breaching major resistance at 6550/76- a region defined by the 61.8%retracement of the 2024 decline, the July high-close, and the August 2024 low-week close (LWC).

The subsequent rally has now extended more than 4% off the August low with AUD/USD testing resistance today at the 2019 swing low at 6671. The outlook remains constructive while above 6550 with a breach here exposing the next major technical consideration at the upper parallel / 78.6% retracement near 6723- area of interest for possible top-side exhaustion / price inflection IF reached. Subsequent resistance seen at the 2024 high0week close (HWC) / 2024 yearly open at 6795-6811 and the 2023 June high / 2024 high-close at 6900/02.

Key support rests back 6550/76 and a break / weekly close below would be needed to suggest amore significant high is in place / a larger reversal is underway. Subsequent support objectives seen at the July LWC at 6496 and the 52-week moving average, currently near 6440.

Bottom line: The AUD/USD breakout is approaching uptrend resistance with the FOMC interest rate decision on tap tomorrow- From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards the upper parallel – losses should be limited to 6550 IF price is heading higher on this stretch with a close above 6722 needed to fuel the next major leg of the advance.

Keep in mind we get the release of the updated Summary of Economic Projections from the Fed tomorrow and traders will be focused on the updated interest rate dot plot as well as the forecasts on growth, inflation, and employment. Markets are fully priced for a 25bp cut tomorrow with Fed Fund Futures calling for three-cuts this year. Stay nimble into the release and subsequent presser and watch the weekly close here for guidance. Review my latest Australian Dollar Short-term Outlook for a closer look at the near-term AUD/USD technical trade levels.

Australia / US Economic Calendar

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.