AUD\/USD pulled back after a spike to 0.7197. Intraday trading is expected to stay within 0.7130 to 0.7180.<\/p>\n
Over the next 1 to 3 weeks, upside risk remains, but conditions are overbought and momentum has slowed. A daily close above 0.7190 is needed to allow a move towards 0.7220.<\/p>\n
Further declines may occur, but there is no clear rise in downward momentum. Any downturn is expected to be part of the current range.<\/p>\n
Support at 0.7085 remains in place for the bullish case. If 0.7085 is broken, the upside view would weaken.<\/p>\n
The piece was produced using an AI tool and checked by an editor.<\/p>\n
We see the Aussie dollar\u2019s recent pullback from the 0.6800 level as a consolidation phase within a broader uptrend. This view is supported by the Reserve Bank of Australia\u2019s hawkish stance, as their latest minutes highlighted concerns with inflation still running at 3.1%. In the immediate term, we expect the pair to trade within a 0.6710\/0.6770 range.<\/p>\n
The underlying bullish pressure is being fueled by strong commodity prices, with iron ore recently pushing above $125 per tonne. This environment suggests that buying out-of-the-money call options or implementing bull call spreads could be a viable strategy to capture potential upside. These structures would allow traders to profit if the Aussie continues its climb while limiting downside risk.<\/p>\n
This situation is similar to the overbought conditions we observed in early 2025, where a brief pullback preceded the next leg higher. For the current bullish case to remain intact, the pair must hold above the strong support level of 0.6650. A decisive daily close above the key resistance at 0.6820 would confirm the trend\u2019s resumption, opening the way for a move toward the 0.6900 mark.<\/p>\n
Further support for our view comes from the US, where recent CPI data came in below expectations at 2.9%. This has softened the US dollar, as markets are now pricing in a more cautious Federal Reserve. This dynamic makes the Aussie dollar comparatively more attractive and supports the case for continued strength.<\/p>\n
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