Australian Dollar Outlook: AUD/USD Drop Deepens- Exhaustion Risk Rises

Australian Dollar Technical Outlook: AUD/USD Short-term Trade Levels

AUD/USD on pace for a sixth consecutive daily decline, bears approaching October lows
While outlook remains tilted to the downside, near-term exhaustion risk is mounting
Resistance 6508/20, 6546 (key), 6574- Support 6461, 6440/45 (key), 6404/15

The Australian Dollar remains under pressure, with AUD/USD on track for a sixth straight daily decline and down more than 2% from the late-October highs. The selloff has pushed price back into the lower bounds of the October range, where near-term exhaustion risk is starting to build. While the medium-term trend remains bearish, traders are looking for a possible reaction off this support zone for guidance into the November opening range. The focus now shifts to whether this pullback can stabilize or fuel another leg lower in the days ahead. Battlelines drawn on the Aussie short-term technical charts.

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

Australian Dollar Price Chart – AUD/USD Daily

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

Technical Outlook: In my last Australian Dollar Short-term Outlook we noted that AUD/USD was, “trading within a well-defined weekly range just above median-line support, and the immediate focus is on a breakout for near-term guidance with the broader outlook still weighted to the downside while within this formation.” The range broke the following week with Aussie rallying 2.7% off the October lows before reversing sharply lower post-Fed. Price is now poised to mark a six-consecutive daily decline with AUD/USD plunging 2.4% off the late-October high. Threat rises for some near-term exhaustion here, but the risk remains weighted to the downside while below the monthly open.

Australian Dollar Price Chart – AUD/USD 240min

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

Notes: A closer look at Aussie price action shows AUD/USD continuing to trade within the confines of a descending pitchfork extending off the yearly high with the bears breaking through the medina-line yesterday on the heels of the RBA rate decision. Initial support now rests with the 88.6% retracement of the mid-October rally at 6461 and is backed closely by the October low and 200-day moving average at 6440/45. Look for a more significant reaction there IF reached with a break / daily close below needed to mark downtrend resumption. Subsequent support objectives eyed at the 38.2% retracement of the yearly range and the August swing low at 6404/15 and the June low at 6372- both levels of interest for possible downside exhaustion / price inflection IF reached.

Look for initial resistance along the median-line backed by the 61.8% retracement and the September low-day close (LDC) at 6508/20. Near-term bearish invalidation is eyed at the objective weekly / monthly open at 6546 with a breach above the Fed-day reversal close at 6574 ultimately needed to suggest a more significant low is in place / a larger reversal is underway.

Bottom line: The AUD/USD decline attempting to break below slope with price now trading near the October close lows. From a trading standpoint, a good region to reduce short-exposure / lower protective stops- rallies should be limited to 6545 IF price is heading lower on this stretch with a close below the October lows needed to fuel the next leg of this decline.

Event risk is limited into the close of the week with Australian employment data on tap next week. Stay nimble into the monthly opening range and watch the weekly closes for guidance. Review my latest Australian Dollar Weekly Forecast for a closer look at the longer-term AUD/USD technical trade levels.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term 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.