Australian Dollar technical forecast: AUD/USD at pivotal resistance

Australian technical forecast: AUD/USD weekly trade levels

Australian Dollar rallies back into critical pivot zone
AUD/USD October rally vulnerable while below confluent resistance
Resistance 6991-7021, 7137, 7305– support 6780-6817, 6670/73 (key), 6548

The Australian Dollar has rallied back into a major resistance pivot early in the week. This zone has produced some major reactions in price with the last attempting prompting a massive outside-weekly reversal. The rally may be vulnerable in the days ahead and I’m on the lookout for possible downside exhaustion on pullback. These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart.

Discuss this AUD/USD setup and more in the Weekly Strategy Webinars beginning February 27^th.

Australian Dollar Price Chart – AUD/USD Weekly

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

Technical Outlook: The Australian Dollar is once again testing a critical pivot zone around at 6991-7021- a region defined by the November 2020 low, the 2020 yearly open and the 2018 low. We’re looking for a possible topside exhaustion / price inflection into this zone in the week ahead.

Initial support rests with the 38.2% retracement of the October advance / objective yearly open at 6780-6817 backed by the 2008 low-week close / 2019 low at 6670/73. A break / daily close below this threshold would threaten resumption of the broader downtrend.

A topside breach / close above this key zone would shift the focus back towards the August high at 7137 and key resistance at the 61.8% retracement a 7305- look for a larger reaction there IF reached.

Bottom line: Aussie has stretched into a major pivot zone at confluent resistance and the broader October rally may be vulnerable here near-term. From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 6670 IF price is indeed heading higher with a breach above 7136 needed to validate a larger breakout. I’ll publish an updated Australian Dollar short-term outlook once we get further clarity on 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 Twitter @MBForex

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