- 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?
Australian Dollar Price Chart– AUD/USD Monthly Timeframe
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
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
