Australian Dollar Short-term Outlook: AUD/USD Plunges Back Down Under

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

Australian Dollar plunges back below 2023-open after rallying nearly 7% off yearly low
AUD/USD now eyeing initial uptrend support- risk for price inflection
Resistance 6816, 6874/91 (key), ~6950s– support 6708/6731, ~6692, 6627 (key)

The Australian Dollar plunged more than 1.2% since the weekly-open with AUD/USD poised for a third consecutive daily loss. The move now exposes the first test for the monthly breakout and the focus is on possible exhaustion / price-inflection into uptrend support. These are the updated targets and invalidation levels that matter on the AUD/USD short-term technical chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this AUD/USD technical setup and more. Join live on Monday’s at 8:30am EST.

Australian Dollar Price Chart – AUD/USD Daily

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

Technical Outlook: In last month’s Australian Dollar short-term outlook we noted that AUD/USD was, “testing key support at the objective yearly range-lows – looking for possible exhaustion / inflection into this zone (watch the weekly close).” The support zone in focus was at 61.8% retracement of the 2022 advance, the October high and the yearly opening-range lows near 6547/65. An intra-week plunge turned just pips from the 61.8% extension of the February decline at 6451 (low registered at 6458) with Aussie staging a rally of more than 6.8% off that low.

An eleven-day stretch cleared yearly downtrend resistance (red) and was interrupted by just one-day until last week when Aussie was abruptly halted at the 61.8% Fibonacci retracement of the yearly-range near 6891. A three-day pullback has now taken back more than 2% and the immediate focus is possible downside exhaustion into initial support- just lower.

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 formation extending off the April / May lows with the median-line now highlighting key near-term support at 6708/31- a region defined by the April high-day close and the 38.2% retracement of the monthly advance.

Note that the 200-day moving average rests just lower near ~6692 – both levels of interest for possible downside exhaustion / price inflection. A break / close below this threshold would suggest a larger correction is underway towards 6673 and the 61.8% retracement of the recent advance at 6627- look for a larger reaction there IF reached.

Yearly-open resistance stands at 6816 backed by the weekly-open / 61.8% retracement at 6874/91- a breach / close above this level is needed to mark uptrend resumption towards the highlighted slope confluence near ~6950s and the November 2020 low / 2020 open at 6991-7017.

Bottom line: Despite a yearly-range of nearly 10%, Aussie is now less than 0.9% from the 2023 yearly open- this is still a slug fest. In the near-term, the AUD/USD rally has exhausted into Fibonacci resistance- just ahead of the uptrend. From a trading standpoint, we’re looking for possible downside exhaustion on a move towards the median-line. Rallies should be capped by the yearly-open IF price is heading lower on this stretch- look for a larger reaction on a drive towards 6700 for guidance. Review my latest Australian Dollar weekly technical forecast for a closer look at the longer-term AUD/USD trade levels.

Key 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 Twitter @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.