Insights 
VT 
Support and Resistance Levels
Immediate support lies around 0.6480, with a break exposing the next support at 0.6450. A move below this area may lead toward 0.6415 and beyond. On the upside, resistance is near 0.6535, with a breakthrough potentially shifting the near-term bias to neutral and targeting 0.6600.
The Australian Dollar’s value is influenced by Reserve Bank of Australia’s interest rates, Iron Ore prices, China’s economic health, inflation, growth rates, and trade balance. Higher interest rates and positive trade balances strengthen the AUD. The health of China’s economy also impacts AUD, with strong growth increasing demand for the currency. Iron Ore prices are a key driver, with rising prices boosting the AUD’s value.
The AUD/USD appears to be consolidating within a tight range, suggesting limited movement in the immediate term. We see the price action confined between 0.6480 and 0.6520, with a clear bearish bias in place. This environment suggests that selling rallies may be a more prudent strategy than buying dips in the coming weeks.
The pair remains stubbornly below its 50-day and 100-day simple moving averages, which often act as dynamic resistance. For options traders, this technical ceiling near 0.6535-0.6560 could be an attractive area to consider selling call spreads. This strategy would capitalize on the expectation that the price will fail to break higher.
This bearish outlook is supported by fundamentals, as we’ve seen the Reserve Bank of Australia hold its cash rate steady at 4.35% for much of the past year. In contrast, the US Federal Reserve’s comparatively firm monetary policy has kept the US Dollar Index strong, recently trading above the 104 mark. The interest rate differential continues to favor the greenback over the Aussie dollar.
Monitoring Key Indicators
Furthermore, demand from Australia’s largest trading partner is not providing a significant lift at the moment. Recent economic data from China showed industrial production expanding at a stable but uninspiring 4.5% year-over-year, while iron ore prices have been hovering around $135 a tonne, failing to spark a currency rally. These factors remove key potential tailwinds for the Australian dollar.
We are closely watching the 0.6480 support level as a key trigger for further downside. A decisive break and close below this mark on a daily basis could signal a new bearish leg, opening the door for a move toward the 0.6450 level we saw last week. Traders might view such a breakdown as an opportunity to initiate new short positions or purchase puts with lower strike prices.
