AUD/USD Weekly Price Outlook: Aussie Reversal Targets In View

In this series, we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. The Australian Dollar has come under considerable pressure after reversing off confluence resistance into the start of December trade. Here are the key targets & invalidation levels that matter on the AUD/USD weekly chart heading into the close of the year.

AUD/USD WEEKLY PRICE CHART

AUD/USD Weekly Price Chart

Notes: In my previous AUD/USD Weekly Technical Outlook we noted that Aussie was trading within the confines of this descending pitchfork formation extending off the 2017 & 2018 highs with a key resistance confluence eyed at the upper parallel. Our ‘bottom line’ cited a constructive outlook but that, ‘Ultimately a breach above the May low-week close at 7385 would be needed to suggest a more significant low is in place.’

Aussie registered a high at 7393 into the open of the month before reversing sharply lower. Price is poised to post an outside weekly reversal off confluence resistance if we close at these levels (typically bearish) and leaves the October advance at risk while below this threshold. Interim support targets rests at 61.8% retracement at 7163 with a break below the yearly low-week close at 7087 needed to mark resumption of the broader downtrend targeting the 2016 low-week close at 6970. A topside breach of this formation would shift the focus back toward the 52-week / 200-week moving averages at ~7500/10.

Bottom line: Aussie is carving its monthly opening range just below technical resistance an leaves price vulnerable to further losses while below 7385. From a trading standpoint, look for a reaction on a move into Fibonacci support at 7163- weakness beyond this point would keep the focus on 7087. For now, our focus will be on the weekly close. I’ll publish an updated AUD/USD scalp report once we get further clarity on near-term price action.

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