Takeaway

The presenter argues the Australian Dollar's rally has stalled after reversing from a major multi-year resistance zone at 0.7208-0.7213. While a deeper pullback is possible, the broader uptrend is considered intact as long as price holds above key support at 0.7080-0.7083. Upcoming US jobs data is seen as the primary catalyst that could shift Fed rate expectations and drive the next significant move.

What the presenter said

• The AUD snapped a seven-week winning streak, rallying into a major resistance zone and posting an outside-day reversal off the highs last week. [00:13]
• The key weekly resistance level is 0.7208-0.7213, which is the 100% extension from last year's low and the 61.8% Fibonacci retracement of the 2021 high. [00:23]
• The immediate focus is on a potential pullback, but the price action is still within the confines of a multi-year uptrend. [00:49]
• Near-term bullish invalidation for the uptrend is at the 0.7080-0.7083 support zone, which represents the May low and a 100% extension. [02:29]
• A close below 0.7080-0.7083 would suggest a more significant top is in place and could signal a larger trend reversal. [02:39]
• To resume the uptrend, the presenter states a daily close above 0.7208-0.7213 is needed. This would target the 2026 high close at 0.7258. [03:02]
• Following comments at the Jackson Hole symposium, the market is now pricing a ~67% chance of a Fed rate hike in September, a significant shift from a ~60% chance of rates holding. [03:43]
• Weaker-than-expected US employment data could curb the Fed's appetite for tightening and alter these rate expectations. [03:51]

Trade ideas

None stated. The presenter's view is that the uptrend remains valid provided losses are limited to the 0.7080-0.7083 support zone. A breach above 0.7213 is required to validate uptrend resumption.

Levels and data cited

Price Levels (AUD/USD): * Resistance: 0.7161, 0.7183, 0.7208-0.7213 (key resistance) * Support: 0.7120-0.7126, 0.7080-0.7083 (key support / bullish invalidation) * Upside Target: 0.7258

Data Cited: * Australia: Q2 GDP figures * United States: August ADP employment (47,000 expected), August Non-farm payrolls * FedWatch Tool: Target rate probabilities for the September Fed meeting show a 67% chance of a rate hike.

Risks and what would invalidate this

• A break and close below the 0.7080-0.7083 support zone would invalidate the near-term bullish outlook and suggest a larger trend reversal is underway.
• A weaker-than-expected US employment print could shift interest rate expectations against the US dollar and curb the central bank's appetite for tightening.