AUD/USD Price Outlook: Compression at 0.7040, Breakout or Rejection Ahead?
AUD/USD is currently heading straight for a descending trendline on the 2 hour chart while sitting inside a key supply zone around 0.7035-0.7060. This is a key spot. Price has rebounded from the 0.6975-0.7000 support zone, but now its momentum is running into some structural resistance.
The 200 EMA is hovering near 0.7040, which is adding to the resistance cluster. The 50 EMA has flattened out and is actually below price, suggesting short-term recovery – but not yet a clear bullish turn. Until the pair can clear both the trendline and 0.7060 on a strong close, then the upside will remain corrective.
Looking structurally, the market has been forming lower highs since the 0.7136 peak. The current bounce is testing that bearish structure. A clean break above 0.7060 would open the way to 0.7090 and 0.7136. Beyond that, 0.7180 is the next big target.
But if the pair fails at this trendline then pressure will remain intact. A rejection here could reverse price back to 0.7006, then 0.6973. A break below 0.6945 would confirm that the downtrend is in full flight.
Key levels to watch:
- Resistance: 0.7060, 0.7090, 0.7136
- Support: 0.7006, 0.6973, 0.6945
A decisive breakout or a sharp rejection from 0.7040-0.7060 will set the course for the next move up or down.
The Analyst’s Verdict: Watch the NFP Open
As a professional analyst, my advice to clients at the moment is to stay nimble ahead of the US NFP release tonight. While the RBA is hawkish and the Australian economy is booming, a strong US jobs number could supercharge the USD and force a break down to 0.6900.
Trade Idea: Look for long positions only after a confirmed break above 0.7060 – that’s your buy signal, target 0.7090. On the other hand, if price breaks below 0.7033 and stays there, you’ll want to sell, targeting 0.6973 or lower.
