AUD/USD rebounded to 0.6938, after it had been expected to drift lower. The rebound lacked momentum.
In the near term, the pair is expected to trade in a 0.6890 to 0.6940 range. Over the next one to three weeks, it is seen moving within a wider 0.6835 to 0.6955 band.
Near Term Range Outlook
The broader technical view indicates downward pressure remains. A break below the 0.6850 to 0.6870 support area could open a move towards 0.6765.
The article was produced using an artificial intelligence tool and reviewed by an editor.
We see the recent bounce in the Australian dollar as a short-term move that is already losing steam. The pair is most likely to trade sideways in a narrow band between 0.6890 and 0.6940 in the immediate future. This suggests that options strategies designed to profit from low volatility could be appropriate for now.
The broader outlook for the next one to three weeks remains tilted to the downside, with a potential trading range of 0.6835 to 0.6955. This bearish view is reinforced by fundamental factors, including recent data showing iron ore prices have fallen below $100 per tonne and a growing policy gap between the US Federal Reserve and the Reserve Bank of Australia. The US jobs report from last Friday showed a resilient labor market, suggesting the Fed has little reason to cut interest rates soon.
Key Support Break Scenario
The most important signal for traders will be a clear break below the support area of 0.6850/0.6870. Should this level fail to hold, it would likely trigger a sharper decline, presenting an opportunity to buy put options or initiate short positions with a target of 0.6765. Looking back at similar price action throughout 2025, we saw that rallies often faded, indicating underlying weakness in the currency pair.
