AUD/USD briefly probed 0.7069 before reversing to 0.6984, after which the pullback was described as overdone. The near-term expectation is for range trading, with the pair seen oscillating between 0.6980 and 0.7030 rather than extending the decline. Resistance remains centred on 0.7075, which capped the latest push higher.
Over a 1–3 week horizon, the broader bias is still upward, even as momentum has “not increased much”. The pair had been referenced at 0.7040 on 03 Aug after closing higher for a fifth consecutive week, with last Friday’s close at 0.7020 representing a 0.49% weekly gain. Further advances are expected to meet firm resistance at 0.7075, while a clear break below 0.6980 would indicate that upside pressure has eased.
Intraday Range-Bound Trading Strategies
We advise derivative traders to focus on range-bound strategies today as the Australian Dollar stabilizes between 0.6980 and 0.7030. Following the sudden drop from 0.7069 down to 0.6984, the immediate downward momentum seems to have run its course. Traders can look to buy near the 0.6980 support level and take profits as the pair approaches 0.7030.
This cautious range-play is highly relevant today as the Reserve Bank of Australia holds its interest rate meeting to tackle inflation that has recently hovered around 3.8%. Historically, high-interest rate differentials have supported the Aussie dollar, but global economic headwinds keep the currency capped. Utilizing tight stop-losses just below 0.6980 is vital to protect against unexpected volatility from today’s central bank decisions.
Medium-Term Outlook and Key Levels
Over the next one to three weeks, we believe the broader bias remains to the upside, though any rally will face heavy resistance at 0.7075. Derivative traders should avoid long positions above this cap until we see a clean, sustained break. On the other hand, if the market breaks below 0.6980, the upward pressure will fade, and we should pivot toward selling.
