Australian Dollar Technical Analysis: AUD/USD, AUD/JPY
Australian Dollar Talking Points:
- AUD/USD is very near a fresh four-year-low, rivaling levels not seen since the pandemic was getting priced-in during early-2020.
- Sellers shied away from the two-year-low on the final day of 2024 trade but that bounce was short-lived, with bears defending the .6300 level. The bigger question now is how much motivation sellers might have upon prints of fresh lows.
- AUD/JPY is grasping on to a Fibonacci support level and there’s now resistance potential at prior support of 100.00.
It’s been tough sledding for AUD/USD since the Q4 open and the pair is now nearing some extreme levels on a longer-term basis. Going back to 2008, there’s only been limited testing below the .6500 level and even less below the .6000 handle.
The 2008 low of .6007 was tested through in March of 2020 when the pandemic was getting priced in, and then the big figure helped to set support a month later in April of that year: But outside of that there hasn’t been much for price action below the big figure in Aussie.
On a shorter-term basis, the current two-year-low at .6170 almost came into the equation in late-2024 trade but buyers held the low above that price by a mere nine pips, leading into a bounce in early-2025 trade.
But sellers are making another push after resistance showed at .6300 and, at this point, those longer-term extremes are nearly in the equation.
AUD/USD Monthly Chart
AUD/USD Bearish Exhaustion
From the weekly chart below we can see a bit of indecision around the New Year open, as last week’s doji led to an initial bounce until the .6300 level came into play. The reversal from that wiped out Monday’s gains but at this point, there’s more trepidation showing as bears haven’t shown willingness to test a fresh low.
Last week’s low of .6179 is just nine pips above the October 2022 low of .6170; and those are big levels on the AUD/USD chart. This also complicates strategy, but if there is a poke to a fresh low followed by another show of trepidation from bears, the door could open for bounce scenarios in the pair. Initial scope would be limited, however, to prior support of .6199, until or unless bulls were able to show a stronger move that could exhibit some element of control.
AUD/USD Weekly Chart
AUD/USD Alternative Scenarios
This would require a few additional pieces falling into place – but if we do see a hold of today’s low, that could possibly constitute a higher-low for the pair above last week’s swing-low of .6179. That would then need a higher-high above the Monday swing of .6300 to provide a higher-high to go along with a higher-low; but if that scenario plays, we can then start to entertain the possibility of a larger bounce in the pair. That would highlight pullback potential that could, possibly, turn into more of a reversal theme. The next resistance level that I’m tracking above the .6300 handle is the August swing-low of .6349.
AUD/USD Daily Price Chart
AUD/JPY
Given continued Yen-weakness against the U.S. Dollar, AUD/JPY isn’t in the spot near long-term extremes. But, the pair has shown shorter-term bearish price action within the context of digestion in a longer-term move. Resistance held around 102.00 in Q4 which led to a push down to a lower-low, and so far the bounce from that has remained within the context of lower-highs.
There’s resistance potential around the 100.00 level, which is confluent with the 50% mark of the sell-off from the second-half of last year.
AUD/JPY Weekly Price Chart
AUD/JPY Shorter-Term
On a shorter-term basis, there’s a confluent spot of support that the pair has been working with for a few weeks now, plotted around the 97.50 level. There’s two Fibonacci levels of note in tight proximity there and while sellers had an open door to run downside moves following the late-November and early-December sell-off, they failed to do so, instead setting up higher-lows in December trade.
Shorter-term, there’s a rising wedge, often approached with aim of bearish reversals. If that formation is nullified with a topside break, it’s the 100.00 level that would be the next big test.
AUD/JPY Daily Chart
--- written by James Stanley, Senior Strategist
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