Australian Dollar Technical Outlook: AUD/USD Short-term Trade Levels
- AUD/USD has pulled back after failing just ahead of major resistance.
- Price is now testing a confluent uptrend support zone within the broader bullish structure.
- A break below support would signal a deeper correction is underway while a defense at this level could set the stage for another push higher.
- Resistance 7295-7308 (key), 7426, 7560- Support 7201/14 (focus), 7137, 7108 (key)
AUD/USD is on the defensive after stalling just ahead of major resistance, with price now testing a key uptrend support zone. This level represents a critical inflection point within the broader bullish structure, where the next move could prove decisive. A sustained hold would keep the rally intact, while a break would signal a deeper pullback as the new month gets underway. Battle lines drawn on the Aussie short-term technical charts.
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 the Aussie rally had, “extended into a pivotal resistance zone- risk for inflection off this level. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 7074 IF price is heading higher on this stretch with a close above 7214 needed to fuel the next major leg of the advance.” AUD/USD fell more than 1.6% off those highs with price registering an intraday low at 7101 before reversing sharply higher into the close of April.
The rally exhausted into the monthly open on building momentum divergence just ahead of resistance at the 2019 high and the 61.8% extension of the November advance at 7295-7308 (high registered at 7278). The pullback is now testing confluent uptrend support with the weekly opening-range taking shape just above just. This is the first major test for the bulls and a reaction off here may determine the next move in AUD/USD.
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 continuing to trade within the confines of an ascending pitchfork extending of the late-March low. Key near-term support rests at 7201/14- a region defined by the objective monthly open, the 61.8% retracement of the broader 2021 decline, and the 100% extension of the April 2025 advance. Note that the median-line (blue) and the March trendline (red) converge on this threshold over the next few days and a break / close below this zone would be needed to suggest a larger pullback is underway within the broader uptrend. Subsequent support rests with the August 2022 swing high at 7136 backed closely by the 38.2% retracement of the March advance at 7108. Note that the 25% parallel converges on this level into the close of the week- look for a larger reaction there IF reached.
A breakout above the weekly high keeps the focus on 7295-7908- a breach / daily close above this pivot zone is needed to fuel the next major leg of the advance. Subsequent resistance objectives are eyed at the 2022 high-week close at 7427 and the 78.6% retracement at 7560.
Bottom line: The Aussie turned just ahead of resistance with the weekly opening-range taking shape just above confluent uptrend support. Look for the breakout to offer guidance with the long-bias vulnerable near-term. The immediate focus is on the daily close with respect to 7201/14. From a trading standpoint, losses would need to be limited to 7108 IF price is heading higher on this stretch with a close above 7308 needed to fuel the next major leg of the rally.
Keep in mind we get the release of U.S. PPI data tomorrow with retail sales on tap Thursday. Stay nimble here until we clear the May opening range and watch the weekly closes for guidance. Review my latest Australian Dollar Weekly Forecast for a closer look at the longer-term AUD/USD technical trade levels.
Key AUD/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Written by Michael Boutros, Senior Technical Strategist
Follow Michael on X @MBForex
