Aussie Price Outlook Talking Points:
Aussie Technical Outlook: Bearish
This week saw sellers return in the Australian Dollar after the early-September bounce ran into resistance. I had looked at a zone of resistance in AUD/USD during the Tuesday webinar that spanned from .6862-.6873. That resistance held through the FOMC rate decision and as US Dollar strength began to creep-in to the equation in the latter portion of this week, AUD/USD fell down to the first targeted area, running from .6760-.6783. This puts the pair in position to re-test those fresh decade lows that were set in early-August around the .6700 handle before a couple of higher-lows developed later in the month.
AUD/USD Four-Hour Price Chart
Taking a step back on the AUD/USD chart, and there is scope for continued downside. The bigger-picture bearish bias that’s been in-play on the Aussie since early-2018 ran into a wall in early-August after price action touched down to fresh ten-year-lows around the .6700 handle, and that led to the early-September bounce which is now in question. On a longer-term basis, bigger-picture support potential remains around the .6250 area on the chart, which is the same zone that helped to hold the lows in the pair around the Financial Collapse in 2008 into early-2009.
AUD/USD Monthly Price Chart
Aussie Technical Forecast for Next Week: Bearish
For next week, the forecast on the Australian Dollar will be set to bearish, looking for a continuation of this week’s sell-off to press down towards August lows. From a strategy perspective, should a short-term retracement develop after next week’s open, lower-high resistance potential could be sought out around a zone of prior support/resistance that runs from .6808-.6829. The bearish theme could then target a re-test of the prior 2019 flash crash low around .6744, followed by the .6700 handle. At that point, stops can go to break-even as traders look for a short-side breakout on the remaining pieces of the lot.
AUD/USD Four-Hour Price Chart
To read more:
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— Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX