Australian Dollar Forecast: AUD/USD Bears Stall at Support

Australian Technical Forecast: AUD/USD Weekly Trade Levels

• Australian Dollar turns from technical resistance- down more than 3.2% month-to-date
• AUD/USD bears now testing October uptrend- FOMC rate decision, NFPs on tap
• Resistance 6670/73, 6816/19, 6922- Support 6500/25 (key), 6400, 6335

The Australian Dollar is poised for a fourth consecutive weekly decline with AUD/USD slipping below the 52-week moving average. The bears have taken back the entire December rally with price now trading just above a key technical support pivot- battle lines drawn heading into the close of the month with the Fed interest rate decision and Non-Farm Payrolls (NFP) on tap next week. These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart heading into February.

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 AUD/USD was, “trading just below confluent uptrend resistance for a third-consecutive week – risk for topside exhaustion while below this key pivot zone.” The level in focus was 6816/19- a region defined by the 2023 yearly-open and the 61.8% Fibonacci retracement of the 2023 range. Aussie held this resistance pivot into the monthly / yearly open with price plunging more than 5% off December high.

We had noted a constructive outlook, “while above the October trendline (currently ~6600) with a close below the 61.8% retracement at 6500 ultimately needed to put the bears in control.” AUD/USD registered an intraweek low at 6525 last week with price poised to close a second week just below the 52-week moving average at 6615- still, the risk for near-term downside exhaustion / price inflection remains here into the February open.

A break / weekly close below this key support pivot would suggest a more significant high was registered last month and expose a larger setback towards the 78.6% retracement at 6400 (not shown) and the 2023 low-week close (LWC) at 6335.

Weekly resistance now back at the 2008 low-week close (LWC) / 2019 low at 6670/73 with a breach / close above the 6816/19 pivot zone still needed to mark resumption of the October uptrend.

Bottom line: A reversal off technical resistance is now testing support with major event risk on tap next week. From at trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – rallies should be limited to 6673 IF price is heading lower on this stretch with a close below 6500 needed to fuel the next major move in price.

Keep in mind there is major event risk into the February open with the FOMC rate decision and NFPs on tap- stay nimble into the monthly open and watch the weekly closes here. 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

• US Dollar Index (DXY)
• Euro (EUR/USD)
• Canadian Dollar (USD/CAD)
• British Pound (GBP/USD)
• Japanese Yen (USD/JPY)
• Gold (XAU/USD)

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

Follow Michael on X @MBForex