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Australian Dollar Short-term Outlook: AUD/USD Bears Charge 6600

Article By: ,  Sr. Technical Strategist
October 24, 2024 4:33 PM

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

  • AUD/USD four-week sell-off extending more than 4.7% off yearly highs
  • Australian Dollar approaching key pivot zone into monthly close- risk for price inflection
  • Resistance 6707/15, 6759, 6707/18 (key)– Support 6622/28, 6575-6600 (key), 6497

The Australian Dollar plummeted nearly 5% off the highs with AUD/USD now approaching technical support into the monthly downtrend. Although the threat near-term remains weighted to the downside, the focus is on possible reaction just lower with the bears vulnerable into 6600. These are the updated targets an invalidation levels that matter on the AUD/USD short-term technical charts into the close of the month.

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, “A reversal off uptrend resistance is now testing trend support- looking for a reaction into the median-line. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops – rallies would need to be limited to 6819 IF price is heading lower here with a break below 6715 needed to threaten a larger correction / suggest a more significant high was registered last week.”

Aussie rallied for the next two-days with price registering in intraday high at 6759 before reversing sharply lower. The break below 6715 two-days later marked downtrend resumption with AUD/USD plunging more than 4.3% from the October open. The decline is now approaching key technical hurdles, and the focus is on possible downside exhaustion / price inflection into 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 continuing to trade within the confines the descending pitchfork extending we’ve been tracking off the late-September highs. Two zones of interest remain paramount over the next few days at the 200-day moving average / September low at 6622/28 and the 61.8% retracement of the yearly range at 6575-6600- both areas of interest for possible downside exhaustion / price inflection IF reached. A break / close blow this key pivot zone would threaten another bout of accelerated losses towards the yearly low-day close (LDC) at 6497.

Resistance remains unchanged at the objective weekly open / 38.2% retracement at 6707/15 and a breach / close above this threshold would be needed to invalidate the monthly downtrend. Subsequent resistance objectives eyed at the July high-day close (HDC) at 6759 and a major technical confluence at 6807/19- a close above this level would be needed to suggest a more significant low is in place / mark resumption of the broader August uptrend.

Bottom line: A four week sell-off from fresh yearly highs is now approaching major technical support- looking for a reaction down here. From a trading standpoint, look to reduce short exposure / lower protective stops on a stretch towards the lower parallels- rallies would need to be limited by 6700 IF price is heading for a break lower with a close below 6575 needed to fuel the next leg.

Keep in mind we get key inflation data from the US and Australia next week with US non-farm payrolls on tap Friday. Stay nimble into the monthly cross here and watch the weekly closes 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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