Australian Dollar Technical Outlook: AUD/USD Short-term Trade Levels
- AUD/USD surges more than 3.5% off November lows with rally now approaching confluent uptrend resistance
- The risk for near-term exhaustion rises and the advance remains vulnerable while below resistance, with broader bullish viability contingent on holding channel support
- RBA and FOMC interest rate decisions on tap next week- updated dot-plot will be key in determining outlook for monetary policy into 2026
- Resistance 6653 (key), 6700, 6723- Support 6625, 6598, 6569/74 (key)
The Australian Dollar breakout is accelerating into the weekly close with AUD/USD ripping toward confluent uptrend resistance today. While the broader structure remains constructive, the reaction off this threshold will be essential in determining whether the rally can extend or if a pullback within the multi-week uptrend will materialize first. Traders should stay nimble as AUD/USD approaches this level with event risk from the RBA and FOMC on tap next week. 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 AUD/USD was testing confluent support ahead of NFPs, and that from a trading standpoint, “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…” Aussie rebounded off the October lows two-days later with the rally breaking above 6520 into the close of November. The advance has now extended more than 3.5% off those lows with price rallying in ten of the past eleven sessions. The bulls are approaching confluent resistance, and the focus turns to the reaction at this key technical hurdle in the days ahead.
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 trading within the confines of an ascending pitchfork extending off the November lows with the rally now approaching confluent resistance into the upper parallel at the 2025 high-day close (HDC) at 6653.
An embedded channel highlights initial support at the July high at 6625 and is backed by the 61.8% retracement of the September decline at 6598. Near-term bullish invalidation is now raised to the August high and the Fed-day reversal close at 6569/75. Note that the median-line converges on this threshold next week, and losses below this slope would threaten a larger correction within this multi-week uptrend.
A topside breach / daily close above this key hurdle could fuel another bout of accelerated Aussie gains with subsequent resistance objectives eyed at the 67-handle and the 78.6% retracement of the 2024 decline at 6723. Look for a larger reaction here IF reached.
Bottom line: AUD/USD is approaching confluent uptrend resistance into the close of the week, and the risk rises for near-term exhaustion here. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops. Losses should be limited to 6569 IF price is heading higher on this stretch with a close above the upper parallel / 6653 needed to fuel the next major leg of the advance.
Keep in mind we get the release of the RBA and FOMC interest rate decisions next week. The focus will be on the Fed’s updated Summary of Economic Projections, and the interest rate dot-plot will be critical as investors adjust the outlook for monetary policy next year. As of now, Fed Fund Futures are nearly fully priced for a cut next week (88%) with the next rate cut expected in March. Stay nimble into the release and watch the weekly closes here 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
