AUDUSD Forecast – Aussie Approaching Major Resistance Levels

The Australian Dollar is trading flat Friday but holding on to solid gains for the week. The buying seems to be subsiding as the Aussie approaches some major chart barriers. Meanwhile, its U.S. counterpart is providing the upside momentum as it continues to succumb to severe broad-based selling pressure.

At 06:30 GMT, the AUD/USD is trading .6760, down 0.0004 or -0.05%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $66.72, up $0.91 or +1.38%.

The U.S. Dollar extended losses on Thursday after the minutes from the Federal Reserve’s November meeting supported the view that the central bank would downshift and raise rates in smaller steps from its December meeting.

The Reserve Bank of Australia (RBA) is on a similar path, having slowed the pace of hikes precisely because it wants to avoid a recession except its rate hikes will be in 25 basis points increments while the Fed is expected to raise rates by 50 basis points.

Investors are wagering the RBA will lift rates by another quarter point to 3.10% in December and top out at just 3.85%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6798 will reaffirm the uptrend. A move through .6585 will change the main trend to down.

The AUD/USD is currently testing a long-term 50% level at .6760.

On the downside, the nearest support is a minor 50% level at .6691, followed by a main Fibonacci level at .6631.

Daily Swing Chart Technical Forecast

Trader reaction to the long-term 50% level at .6760 is likely to determine the direction of the AUD/USD on Friday.

Bullish Scenario

A sustained move over .6760 will indicate the presence of buyers. The first upside target is a main top at .6798. Taking out this level will reaffirm the uptrend and could trigger an acceleration to the upside with the September 13 main top at .6916 the next major target.

Bearish Scenario

A sustained move under .6760 will signal the presence of sellers. This could trigger an acceleration into the pivot at .6691.