Australian Dollar Short-term Outlook: AUD/USD Breakout Looms

Australian Dollar Technical Outlook: AUD/USD Short-term Trade Levels

AUD/USD threatens breakout of September downtrend- now testing pivotal resistance
Australian Dollar January range-breakout imminent– FOMC, key inflation data on tap next week
Resistance 6270/96, 6348/62, 6434/41 (key)– Support 6170/88 (key), 6100, 6007/45

The Australian Dollar is poised for a breakout with the September opening-range intact just above trend support. The battle lines are drawn on the Aussie short-term technical charts heading into the Fed next week.

Australian Dollar Price Chart – AUD/USD Daily

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

Technical Outlook: In my last Australian Dollar Short-term Outlook we noted that, AUD/USD was, “trading into confluent support into the start of the month / year and while the broader outlook remains weighted to the downside, the immediate focus is on possible inflection off this zone.” The January opening-range remains intact just above downtrend support and the focus is on a breakout in the days ahead.

A breakout of the late-September channel (red) on Monday takes price into resistance near the monthly range-highs today at 6270/96- a region defined by the 2023 swing low and the 2023 low-close. Note that the median-line of a newly adjusted descending pitchfork converges on this zone over the next few days and further highlights the technical significance of this threshold. Threat for possible price inflection here.

Australian Dollar Price Chart – AUD/USD 240min

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

Notes: A closer look at Aussie price action shows AUD/USD trading within the confines of an ascending pitchfork extending off the lows with the median-line further highlighting near-term resistance here into the 63-handle. Initial support rests with the 2022 low / 2025 yearly open at 6170/88 and the immediate focus is on a breakout of the weekly opening-range.

A topside breach / close above this pivot zone exposes subsequent resistance objectives at the August / April lows at 6348/62. Broader bearish invalidation now lowered to the November low / 38.2% retracement of the September decline at 6434/41- area of interest for possible topside exhaustion / price inflection IF reached.

A break / close below this formation / 6170 is needed to mark downtrend resumption towards subsequent support objectives at the 61-handle and 6007/45- a region defined by the 2008 low, the 61.8% extension of the 2021 decline, and the 78.6% retracement of the 2020 advance. Look for a larger reaction there IF reached- loses below this threshold could fuel another bout of accelerated Aussie declines.

Bottom line: A breakout of a multi-month channel is now poised for a break of the monthly opening-range. From at trading standpoint, losses should be limited to 6188 IF price is heading higher on this stretch with a close above 6300 needed to suggest a more significant low was registered last week / a larger bear-market correction is underway. Ultimately, a larger recovery may offer more favorable opportunities closer to downtrend resistance with a break of the monthly range low needed to mark trend resumption.

Keep in mind we get the release of the FOMC interest rate decision and key inflation data from Australia and the U.S. next week. Stay nimble into the releases and watch the weekly close here for guidance. Review my latest Australian Dollar Weekly Forecast for a closer look at the longer-term AUD/USD technical trade levels.

Key AUD/USD Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

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

Follow Michael on X @MBForex

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