The Australian Dollar (AUD) may trade between 0.6700 and 0.6745 short-term. There is potential for AUD to eventually test resistance at 0.6765 according to UOB Group analysts.
In the past 24 hours, AUD reached 0.6747 but lacked enough momentum for a sustained rise. It is likely that AUD will continue to trade sideways today within the 0.6700 to 0.6745 range.
AUD Momentum Short-Term Outlook
Over the next one to three weeks, AUD briefly reached 0.6747 before momentum waned. As long as the support at 0.6680 holds, there is potential for AUD to rise and test the resistance at 0.6765.
The FXStreet Insights Team compiles market observations by various experts. Their content includes input from both commercial analysts and journalists.
2026-01-21T14:42:21.361Z
The Australian dollar is expected to trade in a narrow range for now, but upward momentum is slowly building. The pair has a chance to push higher toward the 0.6765 resistance level in the coming weeks. This positive outlook remains in play as long as the strong support at 0.6680 is not broken.
Trading Strategies and Market Analysis
For derivative traders, this suggests considering cautiously bullish positions with a one-to-three-week timeframe. Buying call options with a strike price near 0.6750, expiring in mid-February, could be a way to profit from a potential rally. This strategy provides upside exposure while clearly defining the maximum risk involved.
This view is supported by recent data showing Australia’s fourth-quarter 2025 inflation came in slightly hotter than expected at 3.6%, reducing the odds of an imminent RBA rate cut. Iron ore prices, a key Australian export, have also found stability, holding above $130 per tonne amid steady demand signals from China. These factors provide a solid fundamental backdrop for the Aussie dollar.
Meanwhile, recent US economic figures have been mixed, with last week’s jobless claims ticking up slightly to 210,000. This has helped cap the US dollar’s strength, giving the AUD/USD pair more room to maneuver to the upside. The market is currently pricing in a less aggressive stance from the Federal Reserve, which helps pairs traded against the dollar.
We saw a similar period of tight consolidation during the fourth quarter of 2025 before the pair eventually broke higher. That move was triggered by a shift in sentiment around central bank policy. History suggests that patience during these sideways phases can be beneficial before the next directional move.
The critical level to watch remains 0.6680, which we see as the line in the sand. A clear and sustained break below this support would negate the current upward bias. Traders should view a breach of this level as a signal to exit bullish positions and reassess the market’s direction.
