Insights 
VT 
AUD/USD and Global Influences
The Reserve Bank aims to keep inflation stable, influencing AUD movements through interest rate adjustments and measures like quantitative easing.
We are seeing the AUD/USD pair holding steady around the 0.6500 level, primarily because of President Trump’s softened tone on China trade policy. This risk-on sentiment is creating a temporary floor for the Aussie, even as the US Dollar Index shows signs of recovery. Traders should note this delicate balance between positive rhetoric and underlying currency pressures.
APEC Summit and Economic Indicators
The upcoming APEC summit in South Korea next month, where a meeting between Trump and Xi is planned, is now a key event on our calendar. However, we must weigh this against recent economic data from China, which showed Q3 2025 GDP growth at 4.8%, slightly missing expectations and suggesting a potential headwind for Australian exports. This economic reality may soon overshadow the political goodwill.
Adding to this caution, the price of iron ore, a critical driver for the Australian dollar, has dipped to near $115 per tonne in recent trading sessions on the Dalian exchange. This aligns with the Reserve Bank of Australia’s recent decision to hold interest rates at historic lows, citing global uncertainties. The RBA’s dovish stance provides little domestic support for the currency.
From a technical standpoint, the bearish Head and Shoulders pattern breakdown from last week is still very much in play. The immediate support we are watching is the weekly low around 0.6440. A break below this level could easily see a slide towards the multi-month support at 0.6400.
Given this setup, we believe buying put options with a strike price below 0.6440 is a sensible approach for the coming weeks. This strategy provides downside exposure, targeting the 0.6400 level, while capping the maximum potential loss. The current low volatility environment makes entry into such positions relatively cheap.
Technical Setup and Trading Strategy
Conversely, any rally in the pair is likely to face significant resistance near the 0.6550 mark, which coincides with the 50-day moving average. We see this as an opportunity for traders to sell call options or establish short positions. Only a decisive daily close above this level would force us to abandon our bearish view.
