AUD/USD Technical Price Outlook: Aussie Recovery Losing Steam

The Australian Dollar has rallied more than 6.6% against the US Dollar off the early-January low with the advance looking vulnerable just below technical resistance. These are the updated targets and invalidation levels that matter on the AUD/USD charts.

AUD/USD DAILY PRICE CHART

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AUD/USD Price Chart - Daily Timeframe

Technical Outlook: In my latest AUD/USD Weekly Technical Outlook we noted that Aussie reversal was, “approaching the first major resistance hurdle, and a make-or-break pivot just higher near 7240s – look for a reaction there IF reached.” Price registered a high at 7235 last Friday before pulling back with Aussie drifting sideways this week. The risk remains for a deeper pullback here but ultimately, we’re looking for more favorable long-entries on a move lower.

Daily support rest at 7145 backed by the median-line of the proposed pitchfork extending off the 2018 / 2019 lows with broader bullish invalidation at 7005/21. A topside breach targets subsequent resistance objectives at 7276 and the 200-day moving average / 61.8% retracement at 7322/27.

AUD/USD 240MIN PRICE CHART

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AUD/USD Price Chart - 240min Timeframe

Notes: A closer look at price action show AUD/USD trading within a tight range this week just above near-term support at 7145. A break below this level would risk a larger setback in price with such a scenario targeting the median-line (currently ~7100) backed by the yearly open at 7042 and the October low at 7021- both areas of interest for possible exhaustion if reached.

Bottom line: The Australian Dollar rebound off multi-year lows looks like it may have lost steam here and leaves the immediate advance vulnerable while below 7275. From a trading standpoint, we’re looking for a break of this channel for near-term guidance. A move lower would risk a larger correction in price – be on the lookout for downside exhaustion ahead of the yearly open IF this advance has legs.

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