Australian Dollar Short-term Outlook: AUD/USD Recovery at Resistance

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

AUD/USD poised to mark outside-daily reversal into monthly high- testing resistance post RBA, US CPI
Australian Dollar risk for exhaustion / price inflection- AU jobs, US PPI / retail sales on tap
Resistance 6541/46, 6581/90 (key), 6622- Support 6486, 6458/65 (key), 6425

The Australian Dollar surged more than 0.9% off the weekly lows on the heels of the RBA rate cut and a mixed US inflation print today with AUD/USD now eyeing technical resistance at the monthly high. The August recovery may be vulnerable into this key pivot zone and we’re looking for a reaction here today. 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 last month’s Australian Dollar Short-term Outlook we noted that, “A breakout of the July opening-range takes AUD/USD into confluent uptrend resistance- risk for topside exhaustion / price inflection here.” Aussie topped that day with price reversing sharply off confluent resistance at the September low / upper parallel near 6622 (yearly high registered at 6625). The subsequent decline extended more than 3.1% into the close of the month before rebounding nearly 2% into the August open. The immediate focus is on this recovery with the advance now approaching downtrend resistance- risk for topside exhaustion / price inflection this week.

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 breaking below near-term support yesterday (red) with the recovery now approaching former slope support as resistance at the monthly high / 61.8% retracement of the July decline at 6541/46- looking for a reaction off this mark with the immediate advance vulnerable while below.

Initial support rest with the May high-day close (HDC) at 6486 and is backed closely by the June low-day close (LDC) / 61.8% retracement of the August advance at 6458/65- losses below this threshold would threaten resumption of the late-July downtrend towards the objective monthly open at 6425, the 200-day moving average near ~6390 and the June low at 6373 (both levels of interests of possible downside exhaustion/ price inflection IF reached).

A topside breach here would threaten a test of key resistance at the 78.6% retracement / yearly HDC at 6581/90- a close above this pivot zone would be needed to suggest a more significant low is in place / potential resumption of the broader AUD/USD uptrend. Subsequent resistance objectives eyed at the September low at 6622 and the 2019 low at 6670.

Bottom line: A rebound off near-term downtrend support is now approaching resistance- risk for topside exhaustion / price inflection. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- rallies would need to be limited to the upper parallel IF price is heading back lower on this stretch with a break below 6458 needed to mark downtrend resumption.

Keep in mind we get the release of Australian employment data tomorrow with Core PPI and retail sales on tap into the close later in the week. Stay nimble into the releases and watch the weekly close here 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

US Dollar Short-term Outlook: USD Bears Test July Breakout

Canadian Dollar Short-term Outlook: USD/CAD Hits Uptrend Resistance

Euro Short-term Outlook: EUR/USD Plunges to Support Ahead of Fed

British Pound Short-term Outlook: GBP/USD Rally Unravels Ahead of Fed

Japanese Yen Short-term Outlook: USD/JPY Coil Set to Snap

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.