AUD/USD Weekly Outlook: Rally Presses Into Key Uptrend Resistance

AUD/USD enters the new month and year on firm footing, extending its rally into a key multi-month uptrend resistance zone. While the broader technical structure remains constructive, the pair is now approaching an area where upside momentum may slow, raising the risk of a near-term inflection.

With Australian inflation data due shortly and key US labor market releases, including ADP and Non-Farm Payrolls, scheduled later this week, incoming macro catalysts could play a decisive role in how price reacts at these levels. The response near resistance is likely to define early January trade for the Australian Dollar.

Technical Context

Last month, the focus was on potential topside exhaustion as AUD/USD approached its 2022 trendline. At the time, rallies were expected to remain capped near the mid-0.65 area unless price could sustain a break higher. Instead, AUD/USD invalidated that scenario quickly, surging more than 2.9 percent from December lows and closing the year at the highs, reinforcing the importance of respecting price confirmation.

That advance now brings AUD/USD into initial resistance at the 78.6 percent retracement of the 2024 decline near 0.6723. Just above, the median line of the 2025 pitchfork comes into play, placing added emphasis on the weekly close relative to this slope. Momentum indicators are also approaching stretched conditions, with weekly RSI pushing toward the highest levels seen since September, a period that preceded a sharp corrective pullback.

Key Support Zones

On the downside, initial support is located near the September high close at 0.6651. This level is backed by a more critical support and bullish invalidation zone near 0.6592, which aligns with the September high week close. A sustained weekly close below this area would suggest a more meaningful high is forming and could signal the start of a deeper corrective phase.

Below there, additional support is seen near the November low week close and the 52-week moving average in the 0.6456 to 0.6464 region, an area that would likely attract stronger longer-term interest if tested.

Upside Scenarios

For the bullish trend to resume cleanly, AUD/USD would need a weekly close above the median line resistance, currently sitting in the 0.6750s. Such a development would open the door toward the 0.6795 to 0.6811 resistance zone, which includes the 2024 high week close and the yearly open. Beyond that, the next major upside objective sits near 0.6900, with the broader 0.6940 to 0.6960 area coming into view if momentum remains strong.

Bottom Line

AUD/USD is approaching a critical technical inflection point as it trades into established uptrend resistance at the start of the month. While the broader trend remains constructive, this area presents a logical zone to reduce long exposure or tighten risk parameters. If the pair is to extend higher, losses would need to remain limited to the 0.6592 level, with a sustained close above the median line required to fuel the next leg of the advance.

With Australian inflation data and key US labour market releases ahead, traders should remain flexible and pay close attention to weekly closing levels for directional guidance. An updated short-term AUD/USD outlook will follow once clearer confirmation emerges.