Australian Dollar Forecast: AUD/USD Breakout Rally Nears Pivotal Resistance

Australian Technical Forecast: AUD/USD Weekly Trade Levels

• AUD/USD has rallied nearly 5% from the June low as the broader advance continues to gain traction with momentum stretching to multi-month highs.
• Aussie is poised for a fifth consecutive weekly gain and has advanced in eight of the past nine weeks.
• The medium-term technical structure remains constructive as buyers attempt to extend beyond the median line of the 2025 uptrend.
• A sustained push through overhead resistance would reinforce the bullish outlook and expose the next major upside objectives.
• Jackson Hole and upcoming U.S. labor-market data highlight event risk heading into the September open.
• Resistance 7023, 7116/20 (key), 7208/14- Support 6927, 6877/80 (key), ~6825

AUD/USD continues to build on an impressive multi-month recovery, with the rally extending nearly 5% from the June low. The advance remains constructive as buyers attempt to clear the median line of the 2025 uptrend, but a major resistance confluence just overhead raises the risk for near-term price inflection. With Jackson Hole directly ahead and the monthly close approaching, the focus is on whether bulls can maintain control and unlock another leg toward the yearly highs. Battle lines drawn on the AUD/USD weekly technical chart.

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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 testing resistance for a third consecutive week and that, “From a trading standpoint, losses should be limited to 6927 IF price is heading higher on this stretch with a close above 7023 needed to fuel the next leg of the rally.” Aussie broke through resistance later that week with the rally extending more than 4.8% off the June lows. The bulls are now poised to mark a fifth consecutive weekly advance with price rallying for eight of the past nine-weeks as momentum reaches the highest levels since May.

AUD/USD is trading within the confines of a newly identified ascending pitchfork extending off the 2025 low with price attempting to breach the median line this week. Key resistance is eyed just higher at 7208/14- a region defined by the 61.8% retracement of the 2021 decline and the 100% extension of the 2025 rally. A breach / weekly close above this threshold is needed to fuel the next major leg of the advance with subsequent resistance objectives eyed at the 2019 high at 7295 and the 2022 high-week close (HWC) at 7427. Note that this level converges on the 61.8% parallel in late-September.

Initial weekly support now rests at the February high close and the 61.8% retracement of the May decline at 7116/20 and is backed by the 38.2% retracement at 7023. This level converges on the lower 61.8% parallel over the next few weeks and losses below this slope would be needed to suggest a more significant high is in place. Key support and broader bullish invalidation rests with the 52-week moving average and the March close low at 6872/77.

Bottom line: AUD/USD is approaching pivotal resistance on the heels of an impressive multi-month rally. From a trading standpoint, a good region to raise protective stops- losses should be limited to 7120 IF price is heading higher on this stretch with a close above 7214 needed to fuel the next leg higher towards the yearly highs.

Event risk picks up into the close of the week with Fed Chair Kevin Warsh scheduled to speak tomorrow at the Jackson Hole Economic Policy Symposium. Markets will be looking for clues on how the Fed views the balance between persistent inflation pressures and signs of moderation in the labor market, with any shift in the policy outlook likely to drive volatility in the U.S. dollar and AUD/USD. Attention then turns to the labor market into the start of September, with the ADP private-sector employment report followed by the highly anticipated Non-Farm Payrolls release. Another soft employment print could further temper expectations for Fed tightening and offer support to the Aussie, while evidence of labor market resilience could reinforce the case for a more restrictive policy stance and keep the greenback supported. Stay nimble into the monthly cross and watch the weekly closes for guidance into the September open. Review my latest Australian Dollar Short-term Outlook for a closer look at the near-term AUD/USD technical trade levels.

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--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex