Australian Dollar Short-term Outlook: AUD/USD Breakout Imminent

Australian Dollar Technical Outlook: AUD/USD Short-term Trade Levels

• AUD/USD surges more than 10% off multi-year lows- rally stalls at uptrend resistance
• Australian Dollar weekly & monthly opening range breakouts imminent– US Core PCE on tap next week
• Resistance 6495, 6550 (key), 6622– Support 6402, 6348/62 (key), 6285

The Australian Dollar continues to coil around the 200-day moving average with the monthly / weekly opening-ranges preserved heading into Thursday. 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 last month’s Australian Dollar Short-term Outlook we noted that a rally off multi-year lows was testing downtrend resistance and that, “losses should be limited to 6245 IF price is heading higher on this stretch with a close above the 200-day moving average need to fuel the next leg of the advance.” Aussie tested support the next day before rebounding with price extending a full 10% off the yearly lows. The rally failed to hold above the 200-day moving average with May opening-range still intact just above support- looking for the breakout 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 in consolidation just below the yearly highs with the weekly opening-range preserved heading into Thursday. Initial resistance is eyed at the yearly high-close at 6495 and is backed by a more significant confluence zone at the 61.8% retracement of the September decline at 6550. Note that the upper parallel of the ascending pitchfork converges on this threshold over the next few weeks and a breach / close above would be needed fuel the next major leg of the advance towards the September low at 6622 and the November high-day close (HDC) at 6680.

Monthly open support rests at 6402 with a critical support steady at 6348/62. A close below this key threshold would validate a breakout of the monthly opening-range and threaten a larger correction towards the 38.2% retracement of the yearly range at 6286- look for a larger reaction there IF reached.

Bottom line: Aussie continues to trade within the confines of a multi-week consolidation range and the immediate focus is on a breakout of the weekly opening-range for guidance. From a trading standpoint, losses would need to be limited to 6348 IF price is heading higher on this stretch with a close above 6550 ultimately needed to mark resumption of the broader April rally.  

Keep in mind we get the release of key U.S. inflation data next week the Personal Consumption Expenditure (PCE) on tap Friday. Stay nimble into the release and watch the weekly close 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.

Active Short-term Technical Charts

• Gold Short-term Outlook: XAU/USD Bulls Defend Make-or-Break Support
• Canadian Dollar Short-term Outlook: USD/CAD Breakout Looms
• Euro Short-term Outlook: EUR/USD Recovery Stalls at Trend Resistance
• Swiss Franc Short-term Outlook: USD/CHF Bulls Tested at Resistance
• Japanese Yen Short-term Outlook: USD/JPY Rejected at Trend Resistance
• US Dollar Short-term Outlook: USD Bulls Steady After Fed Decision
• British Pound Short-term Outlook: GBP/USD Bulls Eye 2024 High

Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex