Australian Technical Forecast: AUD/USD Weekly Trade Levels
- Australian Dollar rally off downtrend support now eyeing downtrend resistance
- AUD/USD risk for exhaustion / price inflection – bulls on notice
- Resistance 6674-6725 (key), 6816, 6922– support 6607, 6547, 6451
The Australian Dollar rallied more than 3.8% off the yearly lows with a two-week rally now testing a key pivot zone at multi-year downtrend resistance. Battle-lines drawn heading into the FOMC. 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 Aussie had, “Aussie has responded to a major technical confluence at downtrend resistance – a good zone to reduce long-exposure / raise protective stops – rallies should be limited to the May high-day close at 6780 IF price is heading lower on this stretch with a close below 6548 needed to mark resumption of the broader downtrend.” AUD/USD plunged more than 5.2% in the following weeks with price registering a low at 6458 before rebounding- that rally is now approaching critical resistance at a multi-year downtrend at 6674-6725- a region defined by the 2008 low-week close, the 2019 low, the 38.2% retracement of the yearly range and the objective 52-week moving average. Risk for exhaustion / price inflection into this key pivot zone.
Initial support rest with the yearly low-week close at 6607 backed by the 61.8% Fibonacci retracement of the 2022 advance at 6547- a close below this threshold would be needed to mark resumption back towards the 61.8% extension of the yearly decline at 6451 and the October reversal close at 6392 (next major support zone).
Bottom line: Aussie is now testing a critical pivot zone into multi-year trend resistance- risk for inflection into 6725. From a trading standpoint, a good region to reduce long-exposure / raise protective stops – losses should be limited by 6547 IF price is heading higher on this stretch. Keep in mind the FOMC interest rate decision is on tap next week- stay nimble here. 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