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Australian Dollar Technical Forecast: AUD/USD Plunges for Fourth Week

Article By: ,  Sr. Technical Strategist
October 23, 2024 5:34 PM

Australian Technical Forecast: AUD/USD Weekly Trade Levels

  • October reversal accelerates- fourth weekly decline invalidates September breakout
  • AUD/USD now testing 52-week moving average / threat is lower below yearly-open
  • Resistance 6715, 6810/19 (key), 6900/16- Support ~6630, 6572/75, 6511 (key)

The Australian Dollar is poised to mark a fourth-weekly decline for the first time since January with AUD/USD now off more than 4.5% from the yearly high. The decline takes price into the yearly-moving average and we’re looking for a reaction down here this week with the broader risk still weighted to the downside for the Aussie. These are the levels that matter on the AUD/USD weekly technical chart into the close of the month.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie setup and more. Join live on Monday’s at 8:30am EST.

Australian Dollar Price Chart – AUD/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView

Technical Outlook: In my last Australian Dollar Technical Forecast we noted that the AUD/USD breakout was, “testing the first major hurdle at confluent resistance- the immediate advance may be vulnerable while below this threshold. From a trading standpoint, losses should be limited to 6810 IF price is heading higher on this stretch…” Aussie turned sharply lower with an outside-weekly reversal that week closing below yearly-open support at 6810. Price is poised to mark a further weekly-decline with the decline now testing the 52-week moving average near ~6630- looking for a possible reaction here this week.

Initial weekly resistance is now eyed back at the 38.2% retracement of the yearly range at 6715 with bearish invalidation lowered to the yearly open / 61.8% retracement of the 2023 range at 6810/19. Ultimately, a weekly close above 6916 would be needed to mark resumption of the August uptrend.

A break / close below the yearly moving average would expose two key levels at the 2024 low-week close (LWC) / 61.8% retracement at 6572/75 and the objective July close low at 6511. Both regions represent areas of interest for possible downside exhaustion / price inflection IF reached.

Bottom line: AUD/USD turned from major resistance last month with the decline invalidating the September breakout. The focus is on a reaction here this week at the yearly moving average with a close below needed to keep the immediate decline viable. From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards 6570s – rallies should be limited to the 25% parallel (currently ~6750s) IF price is heading lower on this move.

Keep in mind we get key inflation data from the US and Australia next week with US non-farm payrolls on tap Friday. Stay nimble into the monthly cross here and watch the weekly closes for guidance. Review my latest Australian Dollar Short-term Outlook for a closer look at the near-term AUD/USD technical trade levels.

Australia / US Economic Calendar

 

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

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

Follow Michael on X @MBForex

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