AUD/USD is trading into uptrend resistance as major data risk approaches. Traders watch closely for a reaction that could set early-month direction.
By : Michael Boutros, Sr. Technical Strategist
Australian Technical Forecast: AUD/USD Weekly Trade Levels
- AUD/USD rally extends toward multi-month uptrend resistance into the start of the month / year
- While the broader structure remains constructive, the immediate advance may be vulnerable near resistance, raising the risk for a near-term inflection.
- Australia inflation and key US jobs data on tap this week
- Resistance 6750s (key), 6795-6811, 6900 - Support 6651, 6592 (key), 6456/64
AUD/USD is advancing into a key uptrend resistance zone as the new month gets underway, putting the recent advance to an important technical test. While the broader structure remains constructive, the immediate focus is on a potential reaction at this slope, where the advance may prove vulnerable near-term. The response here will be critical in determining whether price can extend higher or if a pause or pullback develops into early-month trade. With Australia inflation data due tonight and US Non-Farm Payrolls scheduled into the close of the week, a reaction off these levels may shape the next move in the Australian Dollar. Battle lines drawn on the AUD/USD weekly technical chart.
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Australian Dollar Price Chart – AUD/USD Weekly
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Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView
Technical Outlook: In last month’s Australian Dollar Forecast we highlighted the threat for topside exhaustion as AUD/USD was approaching the 2022 trendline. We noted that, “From a trading standpoint, rallies should be limited to 6598 IF price is heading lower with a break / close below 6453 needed to fuel the next leg in price.” Aussie broke higher later that day with price surging more than 2.9% off the December lows to close the year at the highs. As always, when you’re wrong, you want to be wrong fast.
The advance is now attempting to breach initial resistance at the 78.6% retracement of the 2024 decline at 6723. Note that the median-line of the 2025 pitchfork is just higher and the focus is on the weekly close with respect to this slope. Also keep in mind that weekly momentum is now approaching the 2025 extremes with RSI extending into the highest levels seen since September, right before AUD/USD corrected more than 4.2%- keep an eye on this.
Initial support now rests with the September high-close at 6651 and is backed by bullish invalidation at the September high-week close at 6592. The lower parallel converges on this threshold into the close of the month and a break / weekly close below would be needed to suggest a more significant high is in place and a larger trend reversal is underway. Subsequent support rests with the November low-week close (LWC) and the 52-week moving average near 6456/64.
A weekly close above the median-line (currently near ~6750s) is needed to mark resumption of the April uptrend with subsequent resistance objectives eyed at the 2024 high-week close (HWC) / yearly open at 6795-6811 and the 2024 high-close / June 23’ high at 6900/02. Note that the 75% parallel converges on this threshold into the close of the month- look for larger reaction there IF reached. The next topside objective is eyed just higher at the 2024 high and the 50% retracement of the 2021 decline at 6943/61.
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Bottom line: AUD/USD is approaching uptrend resistance into the start of the month, and the focus is on possible inflection into this slope in the days ahead. From a trading standpoint, a good region to reduce portions of long-exposure / raise protective stops- losses would need to be limited to 6592 IF price is heading higher on this stretch with a close a above the median-line needed to fuel the next leg of the advance.
Keep in mind we get the release of Australia inflation data tonight with US ADP and Non-Farm Payroll data on tap into the close of the week. Stay nimble into the January opening-range and watch the weekly closes for guidance here. I’ll publish an updated Australian Dollar Short-term Outlook once we get further clarity on the near-term AUD/USD technical trade levels.
Australia / US Economic Calendar
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Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts
--- Written by Michael Boutros, Senior Technical Strategist
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