Australian Dollar Technical Forecast: AUD/USD Bulls Vulnerable

Australian Technical Forecast: AUD/USD Weekly Trade Levels

• Aussie snaps back to major pivot zone- testing former support as resistance
• AUD/USD broader threat remains lower while below yearly moving average- support in view
• Resistance 6511/27, 6631/32 (key), 6751- Support 6414/33, ~6380s (key), 6335

The Australian Dollar is taking a reprieve this week after plunging nearly 3.6% off the monthly highs with AUD/USD rallying more than 0.80% ahead of the New York close on Friday. The recovery takes Aussie back into a major pivo-zone, and the focus is on this week’s close with the broader outlook still weighted to the downside while below the 52-week moving average. Battle lines drawn on the AUD/USD weekly technical chart into the close of the month.

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 rebound was approaching resistance and that, “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…” Aussie registered an intraday high at 6688 that week before reversing sharply lower with a break below support / the November opening-range lows last week, now being tested as resistance.

The pivot zone in focus is 6511/27- a region defined by the 61.8% retracement of the 2023 October advance and the July close low. Initial weekly support rests with the 78.6% retracement / April close low at 6414/33 with the 2022 trendline seen just lower near 6380s- a break / close below this threshold would threaten a breakout of a multi-year consolidation pattern. Subsequent support objectives eyed at the 2023 low-week close (LWC) at 6335, the 88.6% retracement at 6283 and the 2022 LWC / 2008 low-close at 6201/10.

 A breach / close above this pivot zone exposes the 52-week moving average / 38.2% retracement pf the September decline at 6631/32- look for a larger reaction there IF reached with a close above needed to suggest a more significant low was registered last week. Subsequent resistance objectives eyed at the 61.8% retracement at 6751 and the yearly open / 61.8% retracement of the 2023 decline at 6810/19 (key).

Bottom line: AUD/USD has rebounded off multi-month lows with the recovery now testing resistance at a major pivot zone- watch the weekly close here. From a trading standpoint, any rallies would need to be limited to 6632 IF price is heading lower on this stretch with a close below 6414 needed to fuel the next major leg of the decline. 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