Australian Dollar technical forecast: AUD/USD turns at trend resistance

Australian technical forecast: AUD/USD weekly trade levels

Australian Dollar six-day rally falters at trend resistance this week
AUD/USD plunges 1.8% off may high- threat for deeper further losses sub-6780
Resistance 6675-6816 (key), 6922, 7000– support 6670/73, 6451, 6393

The Australian Dollar plunged nearly 1.8% off the May high with a six-day rally into the start of May reversing sharply off confluent downtrend resistance this week. The move threatens another drive towards the lows and possible resumption of the broader 2021 decline. 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 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 last month’s Australian Dollar technical forecast we noted that AUD/USD was, “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.” Aussie ripped into confluent resistance at 6675-6816 this week before reversing sharply- the threat remans weighted to the downside while below this threshold.

Initial support is eyed at the 2008 low-week close / 2019 low at 6670/73 with key support steady at the 61.8% Fibonacci retracement of the October advance at 6548 – a break / weekly close below this threshold would be needed to validate aa breakout of the yearly opening-range with such a scenario exposing the 61.8% extension of the yearly decline at 6451 and the October reversal close at 6393- both levels of interest for possible price exhaustion IF reached.

A topside breach / close above 6816 would shift the focus towards the 2023 high-week close at 6922- look for a larger reaction there for guidance IF reached.

Bottom line: Aussie has responded to a major technical confluence at downtrend resistance – a good zone to reduce long-exposure / raise protective stops – rallies should be limited to the high-day close at 6780 IF price is heading lower on this stretch with a close below 6548 needed to mark resumption of the broader downtrend. 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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