Australian Dollar Short-term Outlook: AUD/USD Tests Key Resistance

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

AUD/USD rebounds sharply off support at monthly low- rally now testing pivotal resistance
Australian Dollar risk for exhaustion / price inflection into September- NFPs on tap
Resistance 6545/50 (key), 6580/90, 6622- Support 6494, 6458/66 (key), 6419/25

The Australian Dollar surged more than 2% off the August lows with AUD/USD now pressing into pivotal resistance. This level represents a key inflection zone for Aussie and the focus is on how price responds here, with a breakout needed to keep the recovery viable into September. 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, “A rebound off near-term downtrend support is now approaching resistance- risk for topside exhaustion / price inflection… rallies would need to be limited to the upper parallel IF price is heading back lower on this stretch.” AUD/USD failed at the upper parallel that week with price plunging more than 2.3% off the monthly highs. The decline rebounded sharply off the monthly range lows on the heels of Fed Chair Powell’s comments at Jackson Hole with the subsequent rally now testing resistance into the close of the month- risk for possible inflection off this mark in the days ahead.

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 with a rebound of 25% parallel last week now test confluent resistance at 6545/50- a region defined by the 61.8% retracement of the July decline, the August high-close, and the 61.8% retracement of the broader 2024 decline. Note that the upper parallel converges on this threshold and further highlights the technical significance of this zone.

A topside breach / close above would be needed to suggest a more significant low is in place / a larger trend reversal is underway with subsequent resistance objective seen at the 78.6% retracement / 2025 high-day close (HDC) at 6580/90 and the September low / yearly high at 6622/25.

Weekly-open support rests at 6493 and is backed by the June low-day close (LDC) at 6458. Ultimately, a break / close below the August open / opening-range lows (ORL) at 6419/25 is needed to mark resumption of July downtrend. Subsequent support objectives eyed at the 200DMA (currently ~6387) and the 38.2% retracement of the yearly range / 2024 August low at 6348/53.

Bottom line: A rebound off the August low has covered the entire monthly range in just six-days with the rally now testing confluent resistance at the July downtrend. Risk for price exhaustion / price inflection off this zone into the monthly cross. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses would need to be limited to 6458 IF price is heading higher on this stretch with a close above 6590 ultimately needed to mark resumption of the broader uptrend in AUD/USD.

Keep in mind we get the release of key employment data next week with Non-Farm Payrolls on tap Friday. Stay nimble into the monthly cross here 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.

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Written by Michael Boutros, Sr Technical Strategist

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