Australian Technical Forecast: AUD/USD Weekly Trade Levels
- Australian Dollar stages three-week rally off downtrend support
- AUD/USD breakout of October range threatens larger reversal- RBA on tap
- Resistance 6500, 6607/09, ~6657– Support ~6381/93, 6334, 6200/10
The Australian Dollar is poised to mark a third consecutive weekly advance with AUD/USD rallying nearly 3.9% off the yearly low. A rebound off downtrend support has now cleared the October range-highs and threatens to stage a larger trend-reversal in the weeks ahead. These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart as we look to confirm this turn.
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 Technical Forecast we noted that AUD/USD remained vulnerable after marking, “the first weekly close below key support and we’re searching for a low in the weeks ahead. From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards 6200…” Aussie spent nearly three-weeks testing downtrend support (low registered at 6270) with price contracting within the October range into the November open. A breakout this week takes AUD/USD back above a key pivot zone and threatens a larger reversal in trend. Was a more significant low registered last month?
A three-week rally is testing initial weekly resistance today at the 65-handle – a topside breach / weekly close above this threshold is needed to keep the immediate advance viable towards subsequent resistance objectives at the May low-week close / 38.2% Fibonacci retracement of the yearly range (6607/09) and the 52-week moving average / 2022 Trendline (currently ~6657)- look for a larger reaction there IF reached (broader bearish invalidation).
Initial weekly support rests back at 6381/93 with the yearly low-week close (LWC) / November-open just lower at 6334/37- losses should be limited to this level IF price is heading higher on this stretch. Critical support remains unchanged at the 6200/10 confluence zone- a region defined by the 100% extension of the yearly decline, the 2022 LWC and the 2008 low-close.
Bottom line: Aussie has staged a reversal off downtrend support with the rally taking out the October range highs. From a trading standpoint, losses should be limited to 6634 on pullbacks with a close above the yearly moving average ultimately needed to suggest a larger trend reversal is underway. Keep in mind the RBA interest rate decision is on tap early next week – watch the close. I’ll publish an updated Australian Dollar Short-term Outlook once we get further clarity on the near-term AUD/USD technical trade levels.
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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on Twitter @MBForex