AUDUSD – Any Chance of a Rebound From 2 Year Lows?

AUDUSD’s near 11% fall from late September highs at 0.6942 to the December 31st low at 0.6179 has been an extraordinary, almost one way move, where a series of broader based AUD negative factors and USD positive factors combined to create a perfect downside storm.

Those negative AUD factors include a slowdown in the economy of key trading partner China, the threat of a global trade war as Trump takes office on January 20th, and a central bank (RBA) who shifted towards a more dovish tone at their last meeting in December, although they have yet to cut interest rates, unlike other major central banks.

All this at a time the US dollar sees fresh demand after the Federal Reserve (Fed) reined in their expectations for interest rate cuts in 2025, due to resilient economic data and the uncertainty of what Trump’s pro-growth policies and spending may do to US inflation in the short term.

Now, as we look ahead to a week packed with important data points, AUDUSD traders get to digest whether the RBA could be persuaded to consider a cut to rates at their next meeting if Wednesday’s monthly CPI print comes in below expectations. They also get to evaluate the strength of the US economy with the release of Tuesday’s ISM Services PMI, alongside the four US labour market releases across the week, which culminates with the release of Non-farm Payrolls on Friday January 10th.

So, with all this to ahead of us, is there a chance of a rebound for AUDUSD from its recent 2 year lows?

What Do the Charts Show?

AUDUSD’s fall from its September highs at 0.6942 reflects an extended phase of weakness that has seen breaks of support at 0.6348/62, which were the April and August 2024 lows, then 0.6270, the October 2023 extreme. This drop has now seen AUDUSD traded at its lowest level since October 2022.

This October 2022 low stands at 0.6170 and represents a multi-year downside extreme and as such could be a key area of support. Of course, because it has held and reversed sharp declines previously, doesn’t mean it will do so again, but the closing defence of this level needs to be monitored.

Break or Hold?



Currently, this is a question that is impossible to answer until we see the support tested and gauge the following price action around this level. Here we wait for either a confirmed closing break, or signs of a hold above the support and a more extended recovery. However, it does represent an important focus for the New Year.

What Next If the Support is Broken?

This 0.6170 multi-year low represents an important support, so if it does give way on a closing basis, while very dependant of future price trends, it may result in a more prolonged phase of price weakness.



As the AUDUSD monthly chart above shows, if the 0.6170 support does give way, focus could then turn to the next important low as a potential support level. This could be marked by the 2020 Covid inspired spike low, which stands at 0.5509.

What Next If the Support Holds?

So, what could be the resistance levels to watch on the upside if the 0.6170 low holds any further selling?



The declining daily Bollinger mid-average currently stands at 0.6296, which can often hold, even reverse attempts at price strength within a downtrend, like that currently evident in AUDUSD. Closing defence of this 0.6296 resistance level should be watched, as a confirmed upside break may reflect the emergence of a more sustained period of strength, and a push to higher levels.


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