AUD : Breakout

(Fri, 11 Dec 2020). The Australian Dollar has surged more than 1.3% against the US Dollar since the start of the week with a breakout in AUD/USD now probing fresh multi-year highs. These are the updated targets and invalidation levels that matter on the AUD/USD technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Aussie setup and more.

AUSTRALIAN DOLLAR PRICE CHART – AUD/USD DAILY

Technical Outlook: In last month’s Australian Dollar Price Outlook we noted that AUD/USD had stalled into uptrend resistance with the immediate rally vulnerable into the September yearly highs. A breach to multi-year highs into the December open has fueled a larger technical breakout with Aussie surging through uptrend resistance – these breakouts can often mark accelerated rallies with daily & intraday RSI now breaking into overbought territory. Momentum is on the side of the bulls for now.

Initial daily resistance objectives eyed at the 78.6% Fibonacci retracement of the 2018 decline at 7573 and the 75% parallel / 38.2% of the 2011 decline at 7635- look for price inflection there IF reached with a breach / close above needed to keep the long-bias viable towards 7836. Daily support / near-term bullish invalidation now raised to the November opening-range highs / December open at 7340- weakness beyond this threshold would risk a larger correction towards the lower parallel into the close of the year.

AUSTRALIAN DOLLAR PRICE CHART – AUD/USD 120MIN

Notes: A closer look at Aussie price action highlights the AUD/USD breakout above median-line resistance this week with the advance now probing the 75-handle. Weekly open support at 7430 backed by the September high-day close / weekly opening-range low at 7371. Ultimately a close below 7340 would be needed to suggest a more significant correction is underway.

Bottom line: The Australian Dollar rally has marked a technical breakout above uptrend resistance. From a trading standpoint, the trade remains constructive while above the weekly open – be on the lookout for a reaction on a stretch towards the upper parallels / Fibonacci resistance for guidance IF reached. Use caution here – the advance is mature and the risk rises for a washout as price approaches pitchfork resistance. Review my latest Australian Dollar Weekly Price Outlook for a closer look at the longer-term AUD/USD technical trade levels.

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