Australian Dollar Technical Forecast: AUD/USD Bulls Emerge Ahead of Fed

Australian Technical Forecast: AUD/USD Weekly Trade Levels

• Aussie rebounds off key technical support- poised to mark outside-weekly reversal
• AUD/USD initial resistance in view – Fed interest rate decision on tap
• Resistance 6677, 6778-6819 (key), 6900/16- Support 6582, 6511/27 (key)

The Australian Dollar is poised to snap a five-week losing streak with AUD/USD poised to mark an outside-reversal off key support this week. A rally of more than 2.2% off the lows is now approaching initial weekly resistance levels and we’re looking for possible inflection just higher in the days ahead. Battle lines drawn on the AUD/USD weekly technical chart into the FOMC.

Australian Dollar Price Chart – AUD/USD Weekly

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

Technical Outlook: In last month’s Australian Dollar Technical Forecast we noted that the AUD/USD had turned from technical resistance and that a, “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.” Aussie registered an intraday low at 6512 yesterday before reversing sharply with price now poised to mark an outside-weekly reversal off multi-month lows.

 The immediate focus is on this week’s close with respect to the 52-week moving average (currently ~6635), with weekly resistance eyed at the 38.2% retracement of the September decline at 6677. Critical resistance is eye at 6778-6819- a region defined by the 61.8% Fibonacci retracement, the objective 2024 yearly open, and the 61.8% retracement of the 2023 decline. Note that numerous slopes converge on this region over the next few weeks and a breach / close above would be needed to validate a breakout of the 2021 downtrend.

Monthly-open support rests at 6582 with key support unchanged at 6511/27- a close below this threshold would threaten a retest of the yearly extremes with subsequent objectives seen at the April close low seen at 6433 and the 2022 trendline (currently ~6370s).

Bottom line: AUD/USD has rebounded off confluent uptrend support with the recovery now within striking distance of initial resistance. From at trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 6677- losses should limited to the November open at 6582 with a close above the median-line needed to fuel the next leg in price.

Keep in mind the Federal Reserve interest rate decision is on tap later today with markets widely expecting another 25bps cut from the central bank. Stay nimble into the release and watch the weekly close here for guidance. Review my latest Australian Dollar Short-term Outlook for a closer look at the near-term AUD/USD technical trade levels.

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

Follow Michael on X @MBForex