Australian dollar rebounds from 2023 low
- Aussie dollar rebounds from new multi-month lows
- Threat of AUD/USD exhaustion – broader downside-weighted outlook
- Resistance 6816, 6865, 6922 (key) – support 6547, 6393 (key), 6200/10
The Aussie dollar fell 8.3% on the forex report from the yearly high, with the decline turning just before key technical support this week. The focus is on this bounce from exhaustion within the broader 2021 downtrend boundaries. These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart.
AUD/USD weekly chart
perspective techniques : In last month’s usual techniques on the Australian dollar, we noticed that the pair AUD/USD had “stretched into a major pivot zone at confluent resistance and the broader October rally may be vulnerable…” 6.6% lower than the mid-February highs.
The decline turned just before support at the 61.8% Fibonacci retracement of the October advance at 6547 (low recorded at 6564) with a rally now testing the close of the week of 2008 low / low level of 2019 at 6670/73. Watch the weekly close against this key pivot zone.
Weekly resistance is held with the yearly open at 6816 supported by the 52 week moving average (currently ~6865). The broader bearish invalidation is now down at the yearly close of the week high (close off reversal) at 6922 – a weekly break/close above would be needed to shift focus to the yearly highs.
A weekly break/close below Fibonacci support here would threaten a resumption of the broader downtrend towards the October 2022 midline/reversal – close at 6393 – looks for a bigger reaction there IF reached.
Conclusion : The AUD/USD pair will plunge for 5 of the last six weeks in forex with a break below the yearly opening price, bringing the price back to multi-month lows. From a trading perspective, rallies are three-paneled by the upper parallel even if AUD/USD is facing and going the other way – expect more reaction from the significant test results of Fibonacci support with a group below necessary to mark the recovery. I will post an update on the Australian Dollar’s short-term outlook once we have more clarity on short-term technical trading levels.
By Michel Boutros, Senior Technical Strategist, FOREX.com » Official Site
Michael Boutros has over 20 years of experience in forex, commodities and equity indices. For two nearly ten years, Michael has worked at numerous FX trading desks, brokers and market information websites including Gain Capital, MG Financial, ForexNews.com, Velocity Trade, FXCM, IG and nearly twelve years with DailyFX. I also cited a few names in financial publications, including Reuters, Wall St Journal, CNBC, Bloomberg and KITCO.
Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or solicitation to buy or sell forex cambio contracts or CFDs. Although the information contained in the document comes from sources believed to be reliable, the author does not guarantee its accuracy or completeness, and assumes no responsibility for any direct, indirect or consequential damages which may result in a breach.
