Australian Dollar Forecast: AUD/USD Backs Off Resistance

Australian Technical Forecast: AUD/USD Weekly Trade Levels

• Australian Dollar breakout snaps five-week winning streak
• AUD/USD rally hated at technical resistance- threat for deeper pullback within the uptrend
• Resistance 6793-6810 (key), 6871, 6922/28- Support 6573/93, 6632, 6529/55

The Australian Dollar has rallied nearly 6.9% off the April lows with the recent AUD/USD breakout exhausting into technical resistance last week. Aussie is off more than 0.8% this week and the threat remains for a deeper pullback within the broader uptrend. Battle lines drawn on the AUD/USD weekly technical chart into the close of July.

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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 “AUD/USD has been testing pivotal resistance for over a month now and the immediate focus is on a breakout of the 6556-6690 range for guidance. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to yearly moving average IF price is heading higher on this stretch with a breach / close above 7700 needed to fuel the next leg in price.”

Aussie held resistance for another two weeks before breaking sharply higher into the July open with price rallying nearly 2.5% off the monthly low. The rally exhausted into major technical resistance last week and the immediate focus is on this pullback with the broader outlook constructive while within this upslope.

Initial weekly support now rests with former resistance at 6673/90 and is backed by the 38.2% retracement of the April rally at 6632. Broader bullish invalidation now set to the 61.8% Fibonacci retracement / 52-week moving average at 6529/55- losses below this threshold would risk another bout of accelerated losses towards the yearly low-week close at 6433.

Key resistance remains unchanged at 6793-6819- a region defined by the 61.8% extension of the April advance, the objective yearly open, and the 61.8% retracement of the 2023 decline. A topside breach / weekly close above is needed to fuel the next leg of the advance with such a scenario exposing subsequent resistance objectives at the December highs (6871) and the 2023 high-week close (HWC) / 100% extension at 6922/28- look for a larger reaction there IF reached.

Bottom line: The AUD/USD breakout has responded to the first major resistance pivot and while the broader outlook is still constructive, the risk remains of a deeper pullback within the April uptrend. From at trading standpoint, losses should be limited to 6632 IF price is heading higher on this stretch with a close above 6819 needed to mark uptrend resumption.

Keep in mind we get in the release of key US inflation data next week with the June Personal Consumption Expenditure (PCE) on tap into next week- stay nimble into the release and watch the weekly close for guidance here. 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