Australian Dollar Technical Outlook: AUD/USD Short-term Trade Levels
- AUD/USD trading within a tight weekly range just above support- breakout to offer near-term guidance
- Broader outlook remains weighted to the downside while within September downtrend
- Resistance 6521/27, 6542/50 (key), 6569- Support 6478/83 (key), 6434/43, 6404/15
The Australian Dollar is consolidating in a well-defined range just above median-line support, with AUD/USD coiling ahead of key event risk. The broader outlook remains weighted to the downside while within this formation, but the immediate focus is on a breakout here for guidance. Traders are bracing for volatility with U.S. inflation data due Friday and the FOMC interest rate decision on tap next week — events that could drive a decisive move out of this range. Battlelines 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 my last Australian Dollar Short-term Outlook we noted that, “a reversal off uptrend resistance shifts the focus to a potential test of uptrend support just lower. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stop- rallies should be limited to 6526 IF price is heading lower on this stretch with a close below 6477 needed to fuel a test of the lower parallels.” AUD/USD broke lower two-days later with a decline of more than 2.8% off the October high rebounding sharply off the lower parallel last week. The recovery extended more than 1.3% off the monthly low before exhausting into confluent resistance with this week’s opening-range holding just below. Looking for a potential breakout into the close of the week with major event risk on tap over the next few days.
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 a descending pitchfork extending off the yearly high with the weekly opening-range preserved just above the median-line. Initial resistance is eyed at the September low-day close (LDC) / 61.8% retracement of the August advance at 6521/27 and is backed by the 6542/50- a region defined by the 38.2% retracement of the September decline and the 61.8% retracement of the broader 2024 decline. Note that the upper parallel converges on this threshold into the close of the week and a break / close above this slope would be needed to suggest a more significant low is in place / a larger trend reversal is underway. Subsequent resistance eyed at the August high at 6569 and the October open / 2024 September low at 6613/22.
Initial support rests with the 78.6% retracement / September low at 6478/83 with a break below the median-line needed to mark resumption of the broader downtrend. Subsequent support objectives are eyed at the 100% extension of the September decline at 6443 and the 200-day moving average at ~6434. The next major technical consideration rests with the 38.2% retracement of the yearly range / August low at 6404/14- look for a larger reaction there IF reached.
Bottom line: AUD/USD is trading within a well-defined weekly range just above median-line support, and the immediate focus is on a breakout for near-term guidance with the broader outlook still weighted to the downside while within this formation. From a trading standpoint, rallies would need to be limited to 6550 IF price is heading lower on this stretch with a close below 6478 needed to fuel the next leg f the September downtrend.
Keep in mind we get the release of U.S. inflation data on Friday with the FOMC interest rate decisions on tap next week. Stay nimble into the releases 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 Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
