Australian Dollar technical forecast: AUD/USD eyes trend resistance

Australian technical forecast: AUD/USD weekly trade levels

• Australian Dollar five-week recovery eyeing technical trend resistance
• AUD/USD bear market rally vulnerable into 6800
• Resistance 6797/6817, 6872, 6922 (critical)– support 6674, 6548 (key), 6393

The Australian Dollar rallied more 3.6% off the March / yearly lows with AUD/USD now approaching key resistance at the multi-year downtrend. The battle-lines are drawn heading into the April close. 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 last month’s Australian Dollar technical forecast we noted that AUD/USD had, “plunged five of the past six-weeks with a break below the yearly-open taking price to multi-month lows. From a trading standpoint, rallies should be capped by the upper parallel the IF Aussie is heading lower – look for a more significant reaction on test of Fibonacci support with a close below needed to mark resumption.”

Nearly six weeks later and price has steadily traded within an embedded ascending channel formation with the broader levels unchanged heading into the close of April. Initial weekly resistance stands with the 52-week moving average / objective yearly open at 6797-6817 backed by a more significant zone at 6872-6922- a region defined by the 38.2% retracement of the 2021 decline and the 2023 high-week close. Ultimately breach / close above this threshold would be needed to suggest a larger trend reversal is underway.

Look for support at the 2008 low-week close / 2019 low at 6670/74 backed by the channel line (red line currently ~6640s). A break / close below the 61.8% Fibonacci retracement of the October advance at 6548 would be needed to mark resumption of the broader downtrend in Aussie.

Bottom line: Aussie approaching a key pivot zone around the 2023 yearly open / downtrend resistance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a rally towards the 68-handle. Losses should be limited by near-term channel support IF Aussie is heading higher on this stretch. 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