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Australian Dollar Short-term Outlook: AUD/USD Recovery at Resistance

By :   Michael Boutros , Sr. Technical Strategist

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

  • AUD/USD poised to mark outside-daily reversal into monthly high- testing resistance post RBA, US CPI
  • Australian Dollar risk for exhaustion / price inflection- AU jobs, US PPI / retail sales on tap
  • Resistance 6541/46, 6581/90 (key), 6622- Support 6486, 6458/65 (key), 6425

The Australian Dollar surged more than 0.9% off the weekly lows on the heels of the RBA rate cut and a mixed US inflation print today with AUD/USD now eyeing technical resistance at the monthly high. The August recovery may be vulnerable into this key pivot zone and we’re looking for a reaction here today. 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 last month’s Australian Dollar Short-term Outlook we noted that, “A breakout of the July opening-range takes AUD/USD into confluent uptrend resistance- risk for topside exhaustion / price inflection here.” Aussie topped that day with price reversing sharply off confluent resistance at the September low / upper parallel near 6622 (yearly high registered at 6625). The subsequent decline extended more than 3.1% into the close of the month before rebounding nearly 2% into the August open. The immediate focus is on this recovery with the advance now approaching downtrend resistance- risk for topside exhaustion / price inflection this week.

Australian Dollar Price Chart – AUD/USD 240min

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Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView

Notes: A closer look at Aussie price action shows AUD/USD breaking below near-term support yesterday (red) with the recovery now approaching former slope support as resistance at the monthly high / 61.8% retracement of the July decline at 6541/46- looking for a reaction off this mark with the immediate advance vulnerable while below.

Initial support rest with the May high-day close (HDC) at 6486 and is backed closely by the June low-day close (LDC) / 61.8% retracement of the August advance at 6458/65- losses below this threshold would threaten resumption of the late-July downtrend towards the objective monthly open at 6425, the 200-day moving average near ~6390 and the June low at 6373 (both levels of interests of possible downside exhaustion/ price inflection IF reached).

A topside breach here would threaten a test of key resistance at the 78.6% retracement / yearly HDC at 6581/90- a close above this pivot zone would be needed to suggest a more significant low is in place / potential resumption of the broader AUD/USD uptrend. Subsequent resistance objectives eyed at the September low at 6622 and the 2019 low at 6670.  

Bottom line: A rebound off near-term downtrend support is now approaching resistance- risk for topside exhaustion / price inflection. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- rallies would need to be limited to the upper parallel IF price is heading back lower on this stretch with a break below 6458 needed to mark downtrend resumption.

Keep in mind we get the release of Australian employment data tomorrow with Core PPI and retail sales on tap into the close later in the week. Stay nimble into the releases and watch the weekly close here for guidance. Review my latest Australian Dollar Weekly Forecast for a closer look at the longer-term AUD/USD technical trade levels.

Key Economic Data Releases

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Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

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