Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View More
Australian Dollar Q4 Technical Forecast: AUD/USD Recovery Vulnerable into Close of 2021

Australian Dollar Q4 Technical Forecast: AUD/USD Recovery Vulnerable into Close of 2021

Michael Boutros, Strategist
  • Australian Dollar updated technical trade levels – Monthly, Weekly Charts
  • Aussie recovery off downtrend support now eyeing trend resistance
  • Risk for possible exhaustion into yearly open resistance ~77 – critical support 7014

Heading into the third quarter, our forecast highlighted that the Australian Dollar was threatening a break, “below the yearly opening-range into the close of June and we’re on the lookout for an exhaustion low heading into the third quarter.” We specifically noted that, “A break / monthly close below would be needed to keep the immediate downtrend viable towards key support at the 2015 low-close / 38.2% retracement at 7014/52- and area of interest for possible downside exhaustion IF reached.” Aussie plummeted through support in mid-July with the decline registered a low at 7105 before reversing sharply higher into the close of August – is a low in place?

Advertisement

Australian Dollar Price Chart– AUD/USD Monthly Timeframe

AUD/USD Chart

Source – Trading View; Prepared by Michael Boutros

A look at the monthly AUD/USD charts shows price falling for a fourth consecutive month before rebounding off confluent support at the slope extending off the 2018 high / 1.618% Fibonacci extension of the February decline at 7121 – a recovery off this threshold may still be in the cards but the broader threat remains for a deeper correction while below the 61.8% retracement of the yearly range / high-week close at 7662-7705.

Australian Dollar Chart – AUD/USD Weekly Timeframe

AUD/USD Chart

Source – Trading View; Prepared by Michael Boutros

A closer look at the weekly charts shows Aussie breaking below & recovery back above descending pitchfork support. Initial resistance stands at 7450 backed closely by the 52-week moving average (currently ~7515) and the 61.8% retracement of the yearly range / 2021 yearly open at 7662-7701- a breach / close above this threshold would be needed to mark resumption of the broader uptrend.

Bottom line: We came into the third quarter looking for a low- and we got one. From trading standpoint, the immediate threat is for a higher recovery within the confines of the yearly downtrend. That said, be on the lookout for possible topside exhaustion ahead of 7700 IF price is heading lower with a critical support steady at 7014/52.

Written by Michael Boutros, Technical Strategist

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES