The Australian Dollar (AUD) is expected to trade within the range of 0.6625 to 0.6655 against the US Dollar (USD). Recent observations indicate that while further strength for the AUD is possible, achieving the next resistance level at 0.6685 remains uncertain.
In the past 24 hours, the AUD rose to 0.6649, closing at 0.6639, a gain of 0.46%. Though initially anticipated to trade between 0.6585 and 0.6625, the momentum indicators now suggest limited potential for further rise. Currently, trading is likely to stay between 0.6625 and 0.6655.
Current Trends
Over the past one to three weeks, the AUD was projected to rise, with momentum deemed strong enough to potentially reach 0.6650. The currency touched 0.6649 last Friday. Currently, the rally appears stretched, raising doubts on momentum sufficient to hit 0.6685. Conversely, falling below 0.6590 would indicate a decrease in upward pressure for the AUD. The former ‘strong support’ was set at 0.6550.
Given the current upward pressure on the AUD/USD, we see the pair likely trading within a higher 0.6625/0.6655 range. While further strength isn’t out of the question, momentum indicators are showing some negative divergence, suggesting the recent rally may be losing steam. Traders should be cautious about chasing this move much higher without a fresh catalyst.
The Australian dollar’s recent strength is supported by solid domestic fundamentals. We saw Australia’s third-quarter inflation data from October 2025 come in at a stubborn 3.8%, keeping pressure on the Reserve Bank of Australia to hold rates firm into 2026. Last week’s jobs report for November also showed the unemployment rate dipping back to 3.7%, reinforcing the case for a hawkish central bank.
Adding to the Aussie’s appeal, key commodity prices have been supportive. Iron ore futures, for instance, have recently climbed back above $135 per tonne, a level we have not consistently held since late 2024. This strength in Australia’s primary export provides a fundamental tailwind for the currency that is hard to ignore.
Volatility and Strategic Considerations
However, the advance from late last month appears overstretched, and volatility could be on the horizon. With the pair struggling to decisively break 0.6650, buying call options here could be expensive. This scenario feels reminiscent of the sharp rally we saw in late 2023, which was followed by a period of consolidation.
For those expecting the rally to stall, selling cash-secured puts with a strike price below the 0.6590 strong support level could be a viable strategy to collect premium. A decisive break below this 0.6590 level would be our signal that the upward momentum has faded. This would open the door for traders to consider buying puts or initiating bear put spreads to position for a potential correction.
