Australian Dollar Outlook: AUD/USD Threatens Breakout as Bears Test Support Ahead of NFP

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

• AUD/USD testing lower bounds of a multi-month consolidation pattern, with the bears probing confluent support
• While the near-term trend remains lower, the immediate focus is on a possible price inflection off support as traders brace for Friday’s jobs report
• Resistance 6520, 6535/46, 6575 (key)- Support 6459, 6440 (key), 6404/15

The Australian Dollar is testing confluent support today at the lower bounds of a four-month consolidation pattern, with AUD/USD threatening a breakout as traders brace for the highly-anticipated Non-Farm Payroll report. While the near-term risk remains tilted to the downside, the immediate focus is on a reaction off this zone this week, and the employment data tomorrow could prove pivotal for both the Dollar and broader risk sentiment. Battle lines drawn on the Aussie short-term technical charts.  

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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 AUD/USD was approaching support and that, “From a trading standpoint, a good region to reduce short-exposure / lower protective stops- rallies should be limited to 6545 IF price is heading lower on this stretch with a close below the October lows needed to fuel the next leg of this decline.” Aussie rallied more than 1.8% off those lows and despite registering an intraday high at 6580, price was unable to mark a daily close above the monthly open at 6545. The subsequent decline has erased the entire rally with Aussie now testing confluent support at the monthly low. We are looking for possible inflection off this zone as AUD/USD tests the lower bounds of a multi-month consolidation structure ahead of major event risk.  

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 plunging into support today at 6459- a region defined by the November opening-range low, the 200-day moving average and the August trendline. Losses below this threshold would constitute a break of the objective monthly range with a close below the October low at 6440 needed to validate a breakout of a four-month consolidation pattern. Subsequent support objectives are eyed at the 38.2% retracement of the yearly range and the August low at 6404/15, and the June low at 6373. The next major technical consideration rests with the 2024 August low and the 100% extension of the September decline at 6348/51.

Initial resistance is now eyed at the September low-day close at 6520 and is backed by weekly / monthly open at 6535/46. Ultimately, a breach / close above the Fed-day reversal close at 6575 would be needed to validate a breakout of this consolidation and would suggest a more significant low is in place / a larger trend reversal is underway.