Australian Dollar Forecast: AUD/USD Bulls Eye Major Resistance- Inflection Risk Builds

Australian Technical Forecast: AUD/USD Weekly Trade Levels

• AUD/USD is trading at a major resistance zone near the yearly high after RBA rate hike.
• Ongoing momentum divergence signaling waning upside strength- risk for inflection.
• A rejection here could trigger a deeper pullback within the broader structure while a breakout would signal continuation of the longer-term uptrend.
• Event risk on tap: U.S. ADP employment data & Non-Farm Payrolls
• Resistance 7209/14 (key), 7295, 7427- Support 7137, 7077 (key), 6981/84

AUD/USD is trading just below pivotal resistance at the yearly highs with the bulls eyeing a breakout after the RBA delivered a third consecutive rate hike. The rally has been marked by waning momentum and the focus early in the month is on a reaction at this key technical hurdle. Whether this level holds or breaks is likely to shape the next phase of the trend. 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 a three-week rally was approaching resistance at the yearly high, “risk for inflection here. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to this week’s low IF price is heading for a breakout on this stretch with a close above this pivot zone needed to expose a rally towards the next major hurdle at 7200.” Aussie broke higher later that week with the rally extending into pivotal resistance at 7208/14- a region defined by 61.8% retracement of the 2021 decline and the 100% extension of the 2025 advance. This key zone has capped the yearly advance and building daily & weekly momentum divergence keeps the focus on a reaction at this threshold in the days ahead.

Initial support rests with the August 2022 high at 7137 and is backed by the 38.2% retracement of the year-to-date range at 7077. Note that the median-line converges on this threshold over the next few weeks and losses below this slope would be needed to suggest a more significant high is in place and a larger correction is underway- look for a larger reaction there IF reached. Subsequent support objectives are eyed at the Marc high-week close and the 61.8% retracement at 6981/84.

Bottom line: Aussie is testing pivotal resistance at a major technical confluence with ongoing bearish momentum divergence. The weekly / monthly opening-range is taking shape just below – look for the breakout in the days ahead for guidance with the broader long-bias vulnerable near-term while below this key threshold. From a trading standpoint, losses would need to be limited to 7077 IF price is heading higher on this stretch with a breach / close above 7214 needed to fuel the next major leg of the advance.

Keep in mind we get the release of key U.S. labor data this week with ADP employment tomorrow and the more encompassing Non-Farm Payroll report on tap Friday. Stay nimble into the releases and watch the weekly close for guidance here. 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