**The Australian Dollar Outlook** The Australian Dollar (AUD) is likely to keep declining. However, it doesn’t seem ready to drop to the 0.6443 low we saw earlier this week. Analysts at UOB Group are concerned about the next level, which is 0.6440. Over the next 24 hours, the AUD may fall slightly, but it’s unlikely to hit the 0.6443 low. Keep an eye on 0.6460 as a support level, with resistance at 0.6495. If it breaks above 0.6515, that would suggest less downward pressure. In the past week, it has been suggested that the AUD may drop further, aiming for 0.6440. Although we saw a sharp decline followed by a slight rebound, there hasn’t been a clear increase in downward momentum. A strong resistance is now at 0.6530, updated from 0.6545. **Market Observations and Insights** The FXStreet Insights Team, made up of journalists, shares selected market observations and ideas from analysts. This includes analysis from both commercial groups and various experts. Given the outlook for the Australian dollar, we should consider strategies that benefit from a slow decline or limit any upward movement in the coming weeks. One option is to sell AUD/USD call options with a strike price well above the strong resistance at 0.6530. This would generate income as long as the pair remains below that ceiling, supporting the view of limited upward momentum. This bearish view is backed by differing central bank policies. The US Federal Reserve is maintaining a “higher for longer” stance, especially after the September 2025 inflation report showed that core CPI remains above 3%. Meanwhile, the Reserve Bank of Australia had dovish statements in its last meeting, raising market expectations for potential rate cuts in early 2026 to support the slowing domestic economy. Adding to the weakness, recent economic data from China—Australia’s largest trading partner—shows that China’s third-quarter GDP for 2025 was 4.2%, which was lower than expected. Additionally, iron ore prices have slipped below $100 per tonne. These factors put direct pressure on Australia’s terms of trade and heavily impact the value of its currency. **Options for a Bearish Strategy** For a direct bearish approach, consider buying put options with a strike price near 0.6450, targeting the 0.6440 level. Since momentum appears weak, structuring this as a debit spread by selling a lower-strike put could lower initial costs. This strategy can benefit from a gradual decline without needing a sharp drop. Historically, the mid-0.6400s have been a crucial battleground for the AUD/USD pair throughout 2024 and 2025. A clear break below the 0.6440 support level could lead to a more significant downward move. Therefore, setting profit targets for short positions around this level seems wise for now. Create your live VT Markets account and start trading now.

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