Australian Dollar Outlook: AUD/USD Threatens Breakout as Bears Test Support Ahead of NFP
AUD/USD threatens to break four-month consolidation pattern with bears testing key support ahead NFPs. Battle lines drawn on the Aussie short-term technical charts.
Share this:
Australian Dollar Technical Outlook: AUD/USD Short-term Trade Levels
- AUD/USD testing lower bounds of a multi-month consolidation pattern, with the bears probing confluent support
- While the near-term trend remains lower, the immediate focus is on a possible price inflection off support as traders brace for Friday’s jobs report
- Resistance 6520, 6535/46, 6575 (key)- Support 6459, 6440 (key), 6404/15
The Australian Dollar is testing confluent support today at the lower bounds of a four-month consolidation pattern, with AUD/USD threatening a breakout as traders brace for the highly-anticipated Non-Farm Payroll report. While the near-term risk remains tilted to the downside, the immediate focus is on a reaction off this zone this week, and the employment data tomorrow could prove pivotal for both the Dollar and broader risk sentiment. Battle lines 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 my last Australian Dollar Short-term Outlook we noted that AUD/USD was approaching support and that, “From a trading standpoint, a good region to reduce short-exposure / lower protective stops- rallies should be limited to 6545 IF price is heading lower on this stretch with a close below the October lows needed to fuel the next leg of this decline.” Aussie rallied more than 1.8% off those lows and despite registering an intraday high at 6580, price was unable to mark a daily close above the monthly open at 6545. The subsequent decline has erased the entire rally with Aussie now testing confluent support at the monthly low. We are looking for possible inflection off this zone as AUD/USD tests the lower bounds of a multi-month consolidation structure ahead of major event risk.
Australian Dollar Price Chart – AUD/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView
Notes: A closer look at Aussie price action shows AUD/USD plunging into support today at 6459- a region defined by the November opening-range low, the 200-day moving average and the August trendline. Losses below this threshold would constitute a break of the objective monthly range with a close below the October low at 6440 needed to validate a breakout of a four-month consolidation pattern. Subsequent support objectives are eyed at the 38.2% retracement of the yearly range and the August low at 6404/15, and the June low at 6373. The next major technical consideration rests with the 2024 August low and the 100% extension of the September decline at 6348/51.
Initial resistance is now eyed at the September low-day close at 6520 and is backed by weekly / monthly open at 6535/46. Ultimately, a breach / close above the Fed-day reversal close at 6575 would be needed to validate a breakout of this consolidation and would suggest a more significant low is in place / a larger trend reversal is underway.
Bottom line: AUD/USD is testing confluent support here with major event risk on tap tomorrow. A good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to 6520 IF price is heading for a break lower on this stretch with a close below 6440 ultimately needed to fuel the next major leg of this decline.
Keep in mind the September Non-Farm Payroll report is on tap tomorrow, and traders will be closely eyeing the first major jobs report in months. Fed Fund Futures have continued to discount the December rate decision with market participants now pricing the probability of a cut next month to just 42%. With recent Fed commentary suggesting the committee remains deeply divided on the path of interest rates and with inflation still running well-above target, employment data will be critical ahead of next month’s policy meeting. Stay nimble ahead of the release and watch the weekly close 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
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts
- Japanese Yen Short-term Outlook: USD/JPY Testing Pivotal Resistance at Ten-Month High
- US Dollar Short-term Outlook: USD Rejected at Resistance- Key Test Ahead
- Gold Price Outlook: XAU/USD Bulls Roar Back- Rebound Testing Pivotal Resistance
- Canadian Dollar Short-term Outlook: USD/CAD Rally Stalls at Trend Resistance
- Euro Short-term Outlook: EUR/USD Snaps 1.15- Recovery Risk Rises
- British Pound Short-term Outlook: GBP/USD Plunge Pauses at Support Ahead of BoE
- Swiss Franc Short-term Outlook: USD/CHF Coiled for November Breakout
Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Australian Dollar Outlook: AUD/USD Bears to Face Near-Term Reprieve?
AUD/USD enters the week after four straight declines, but softer Fed expectations, stretched positioning and support could slow the selloff.
Crude Oil Weekly Outlook: Bearish-to-Neutral Setup Holds
Crude Oil Weekly Outlook: The bearish-to-neutral setup holds as OPEC keeps November quotas steady, Gulf exports recover to near prewar levels, US crude inventories continue to rise gradually, and prices remain below a seven-month barrier.
USD/JPY weekly outlook: Quarter turn scrambles rates regime
USD/JPY’s tight relationship with front-end US rates broke down sharply last week, but quarter-turn flows and positioning suggest the disconnect may prove temporary.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.