Jump to content

Australian Dollar Technical Forecast: AUD/USD, AUD/JPY Rally at Risk

Recommended Posts


  • Australian Dollar technical trade level update - Weekly Chart
  • AUD/USD surges more than 3.3% off January lows- 2022 yearly open resistance in view
  • Aussie resistance 7270, 7365/85 (key), 7531- Support 7129, 7066 (key), 6991-7016 (Major pivot)
  • AUD/JPY resistance 83.67, 84.70 (key), 86 – Support 81.30, 80.32, 78.88-79.39 (critical)

The Australian Dollar is attempting to mark a third consecutive weekly advance against the US Dollar this week with AUD/USD now eyeing resistance the objective yearly open. Likewise, AUD/JPY has already failed a test of yearly open resistance with a clean yearly opening-range now intact. Is this just a recovery or is a larger reversal underway for Aussie? These are the updated targets and invalidation levels that matter on the AUD/USD & AUD/JPY weekly price charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Aussie technical setup and more.


Australian Dollar Price Chart - AUD/USD Weekly - Aussie Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview

Notes: In last month’s Australian Dollar Technical Forecast we note that, “The Australian Dollar recovery may be vulnerable while below the yearly open here. From a trading standpoint, the focus is on a break of the January range for guidance…” A decisive break below the monthly opening-range saw Aussie plunge more than 4.7% from the yearly high, back into a critical support pivot at 6991-7016- a region defined by the 2021 low, the 2018 lows, and the 2020 yearly open. The immediate focus is on this potential third-weekly rally off support- just a rebound or a larger reversal?

Yearly-open resistance stands at 7270 backed by a more significant technical confluence at the 38.2% Fibonacci retracement of the 2021 decline / 2017 May low-week close at 7365/85- note that this threshold converges on the 2021 downslope into the open of Q2 with the 52-week moving average just higher at ~7420. Weekly-open support rests at 7129 with near-term bullish invalidation set to the monthly open at 7066- losses should be limited by these levels IF price is indeed heading for a breakout.

Bottom line: The Australian Dollar recovery off key support at the 2021 lows is now approaching the objective 2022 early open- the focus is on a reaction into this zone IF reached. From a trading standpoint, a good region to reduce long-exposure / raise protective stops – losses should be limited by the monthly open with a breach / weekly close above the 52-week moving average needed to suggest a more significant low was registered last month. Review my latest Australian Dollar Price Outlook for a closer look at the near-term AUD/USD technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy


Australian Dollar Trader Sentiment - AUD/USD Price Chart - Aussie Retail Positioning - Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-short AUD/USD - the ratio stands at -1.02 (49.45% of traders are long) – typically neutral reading
  • Long positions are 6.90% lower than yesterday and 14.94% lower from last week
  • Short positions are0.19% lower than yesterday and 1.85% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUD/USD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a slightly stronger AUD/USD-bullish contrarian trading bias from a sentiment standpoint.


Australian Dollar vs Japanese Yen Price Chart - AUD/JPY Weekly - Aussie vs Yen Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview

Notes: A similar scenario can be seen on AUD/JPY with price now attempting to breach above its 52-week moving average at ~82.57. Monthly open support rests at 81.30 backed by the 2019 high close at 80.32- note that this level also represents the yearly opening-range lows and if broke could see a test of a more significant technical confluence at the November low-week close / 2021 yearly-open at 78.88-79.39 – look for a larger reaction there IF reached. A topside breach / close above the yearly open at 83.67 would keep the focus on the 2021 high-week close at 84.70 – a level of interest for possible topside exhaustion IF reached. We’ll touch base on this setup again soon- stay tuned.



Key Australia / Japan / US Data Releases - AUD/USD, AUD/JPY Weekly Event Risk

Economic Calendar - latest economic developments and upcoming event risk.


Follow Michael on Twitter @MBForex

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

Michael Boutros, Technical Currency Strategist with DailyFX
18 February 2022

  • Like 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 06/10/22 17:07
  • Posts

    • Why is this stock unavailable to open for non-Pro clients? Surely a fund is less risky than an individual stock.
    • Hi @Kgrp74 Thank you for reaching out.  HMRC rules don't allow you to hold foreign currency in an ISA, but you can still buy international shares. The gains on currency conversions are only seen and credited in the account once you sell the shares if the currency rate is favorable to you. We also have to consider the 0.5% spread added to the exchange rate and commission charges which would normally offset your profits.  Thanks, OfentseIG
    • DAX/CAC Technical Highlights: DAX reclaimed broken support, but rally still not viewed as bullish CAC 40 has trend-line resistance ahead to watch on further strength   DAX and CAC 40 Technical Outlook: Rally Viewed as Likely to Fail Soon   DAX Daily Chart   DAX Chart by TradingView   The CAC is trading around resistance in the 6k area, with a trend-line from the summer high lying not too far ahead. A turn down could find some initial support in the 5700s, but the low at 5628 is the big level to watch. Broad outlook is of course very similar to the DAX.   CAC Daily Chart   CAC 40 Chart by TradingView   Oct 6, 2022 | DailyFX Paul Robinson, Strategist
  • Create New...