Australian Technical Forecast: AUD/USD Weekly Trade Levels
- Australian Dollar breaks multi-month consolidation- plunges more than 7% off July high
- AUD/USD five-week decline now testing confluent support
- Resistance 6607, ~6690, 6816– Support ~6381/93 (key), 6200/10, 6007/45
The Australian Dollar plunged more than 1.4% this week, marking a fifth consecutive weekly decline into fresh yearly lows. The losses take AUD/USD into a major technical confluence at multi-year slope support- risk for downside exhaustion / price inflection in the days ahead. These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart.
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 was trading, “within the confines of a massive multi-month consolidation formation with price faltering into resistance again this month. From at trading standpoint, the medium-term threat remains lower while below the 2022 trendline with the immediate focus on a breakout of the 6607-6816 range for guidance.” A break lower two-weeks later has fueled a decline of nearly 7.7% off the July highs with Aussie now testing confluence support into the close of the week.
The support zone in focus remains 6381/93- a region defined by the October weekly reversal-close and the 78.6% Fibonacci retracement of the 2022 advance (also converges on the 2020 trendline) . A break / weekly close below this threshold would threaten a much steeper decline towards subsequent support objectives at 6200/10 (the 100% extension / 2022 low-week close / 2008 low close) and 6007/45.
Initial weekly resistance now stands at the May low-week close (6607) and is backed by the 52-week moving average (currently 6690). Broader bearish invalidation now lowered to the objective yearly open at 6816.
Bottom line: A five-week decline takes Aussie into a key technical confluence at multi-year slope support. Bears may be vulnerable while above 6380. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops- rallies should be limited to 6607 IF price is heading for a break here with a close below tis support zone needed to mark resumption. 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