Australian Dollar Technical Forecast: AUD/USD Bears Grind at Support

Australian Technical Forecast: AUD/USD Weekly Trade Levels

Aussie breaks 2022 trend support- threatens sixth weekly sell-off into yearly open
AUD/USD bears testing support for a fourth week, January opening-range intact ahead of NFP
Resistance 6335/62, 6466-6511 (key), ~6576- Support 6170-6200 (key), 6007/45, 5795

The Australian Dollar is threatening a sixth consecutive weekly decline with AUD/USD trading into key support into the start of the year. Battle lines drawn on the AUD/USD weekly technical chart ahead Non-Farm Payrolls.

Australian Dollar Price Chart – AUD/USD Weekly

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

Technical Outlook: In last month’s Australian Dollar Technical Forecast we noted that AUD/USD was, “threatening a break of multi-year support, and the focus is on a pivot into the yearly lows. From a trading standpoint, rallies should be limited to 6433 IF price is heading lower on this stretch with a close below 6335 needed to fuel the next leg of the decline.”

Aussie broke lower the following week with AUD/USD plunging nearly 5.3% off the December high. Price has been testing a key support confluence for the past four-weeks at the 2022 low-week close (LWC) / swing low at 6170-6200. Note that the lower parallel of the September pitchfork (blue) converges on this range and further highlights the technical significance of this zone- threat remains for price inflection off this threshold in the weeks ahead.

Initial weekly resistance is eyed at the 2023 LWC / April low at 6335/62 and is backed by 6466-6511- a region defined by the 38.2% retracement of the 2024 decline and the July close low. We will reserve this threshold as our bearish invalidation level with a breach / close above the median-line needed to suggest a more significant low is in place / larger reversal is underway towards the 200-day moving average (currently 6576) and the 61.8% retracement at 6648.

A break / weekly close below this key pivot zone would threaten another bout of accelerated losses for Aussie with such a scenario exposing subsequent support objectives at the 2008 low / 78.6% retracement of the 2020 advance at 6007/45 and the 2020 low-day close (LDC) at 5795 (both levels of interest for possible downside exhaustion / price inflection IF reached).

Bottom line: AUD/USD has been testing downtrend support for the past four-weeks with the January opening-rang taking shape just above- looking for the breakout. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to 6362 IF price is heading lower on this stretch with a close below 6170 needed to fuel the next major leg of the decline.

Keep in mind we get the release of key U.S. jobs data tomorrow with the December Non-Farm Payroll report on tap. Stay nimble into the release and watch he weekly close here for guidance. Review my latest Australian Dollar Short-term Outlook for a closer look at the near-term AUD/USD technical trade levels.

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

Follow Michael on X @MBForex

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