Australian Dollar Forecast: AUD/USD Bulls at Make-or-Break Resistance

Australian Technical Forecast: AUD/USD Weekly Trade Levels

Australian Dollar rips into multi-year technical resistance- December battle lines drawn
AUD/USD vulnerable near-term- remains constructive while above October support
Resistance 6642/74 (key), 6714, 6816/19- Support 6521, 6425 (key), 6335

The Australian Dollar rallied nearly 6.5% off the October / yearly-lows with AUD/USD faltering at a major resistance zone on the heels of a three-week rally. The battle-lines are drawn into the December-open with the RBA interest rate decision and US Non-Farm Payrolls on tap next week. These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart.

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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 my last Australian Dollar Technical Forecast we noted that AUD/USD had, “staged a reversal off downtrend support with the rally taking out the October range highs. From a trading standpoint, losses should be limited to 6634 on pullbacks with a close above the yearly moving average ultimately needed to suggest a larger trend reversal is underway.” Aussie held support for two-weeks before breaking higher with AUD/USD closing November up more than 4.2%. Price is now testing the yearly moving average into the December open- looking for a reaction here.

The rally briefly registered an intraday high at 6676 this week before pulling back with Aussie now testing confluent resistance at 6642/74- a region defined by the 52-week moving average, the 2008 low-week close (LWC) and the 2019 swing low. Note that a basic trendline resistance extending off the 2022 highs as well as near-term uptrend resistance converge on this threshold over the next few weeks and further highlights its technical significance - risk for some exhaustion here.

Initial weekly support rests at 6521 with medium-term bullish invalidation now raise to the October channel / 61.8% Fibonacci retracement at ~6425. Ultimately, a breach / weekly-close this key pivot zone is needed to suggest a larger trend reversal is underway towards the next major resistance zone around the 2023 yearly-open / 61.8% retracement of the yearly range at 6816/19.

Bottom line: A breakout of the November opening-range has fueled a rally into confluent resistance – bulls may be vulnerable near-term. From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to channel support IF price is heading higher with a close above 6674 needed to fuel the next leg in price.

Keep in mind the Reserve Bank of Australia (RBA) interest rate decision is on tap early next week with key US employment data (NFP) slated for Friday– stay nimble into the December opening-range 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.

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

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