Australian Dollar Forecast: AUD/USD Rally Threatened by Resistance
AUD/USD surged nearly 8.9% off the yearly low with the bulls now testing resistance at the September downtrend. Battle lines drawn on the Aussie weekly technical chart.
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Australian Technical Forecast: AUD/USD Weekly Trade Levels
- AUD/USD rebound off technical support covers 2025 range in three-week advance
- Aussie testing September downtrend- outlook constructive while above 2024 low
- Resistance 6408/29, 6502/50 (key), 6671- Support 6290, 6179-6200 (key), 6007/45
The Australian Dollar is attempting to mark a third-consecutive weekly advance with AUD/USD trading into technical resistance at the September downtrend. While the reversal does keep the medium-term focus higher, the immediate advance may be vulnerable here. Battle lines drawn on the AUD/USD weekly technical chart into the close of the month.
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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: The Australian Dollar rebounded off technical support at multi-year lows this month at 6007/45- a region defined by the 2008 swing low and the 78.6% retracement of the 2020 advance. The subsequent rally has now extended nearly 8.9% off the yearly low with AUD/USD trading just below confluent resistance at 6408/29- looking for a reaction off this mark in the weeks ahead with the near-term advance vulnerable while below.
Initial weekly support rests with the yearly low-week reversal close (LWC) at 6290 and is backed by the 2024 low / 2022 LWC at 6179-6200. Losses below this threshold would threaten downtrend resumption back towards key support at the 60-handle. Subsequent support seen at the 2020 LWC at 5795.
A topside breach / close above this pivot zone exposes key resistance at 6502/50- a region defined by the 52-week moving average, the Julye close low, and the 61.8% retracement of the 2024 decline. Look for a larger reaction there IF reached- ultimately a close above the 2019 low at 6671 would be needed to suggest a more significant breakout is underway.
Bottom line: The Australian Dollar has rallied into confluent resistance at the September downtrend- risk for possible topside exhaustion / price inflection into this threshold. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 6179 IF price is heading higher on this stretch with a close above 6429 needed to suggest a more significant low is in place.
Keep in mind we get the release of key U.S. inflation data (Core PCE) and Non-Farm Payrolls next week into the monthly cross. Stay nimble into the releases and watch the weekly closes here for guidance. I’ll publish an updated Australian Dollar Short-term Outlook once we have 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 X @MBForex
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