The AUD/USD has risen after breaking above the 200-day moving average and a long-term downward trend line. The pair is now approaching a resistance zone between 0.6685 and 0.6710. If it experiences a short-term dip, support can be found around 0.6410. If the pair breaks past the 0.6685-0.6710 zone, it could move up to 0.6800, and possibly even reach levels between 0.6870 and 0.6940, which were seen in June 2023 and are anticipated for 2024.

Bullish Momentum Confirmation

The AUD/USD has continued to rise after breaking a downward trend line that has been in place since 2021. We have also crossed the 200-day moving average, confirming this bullish momentum. The pair is now targeting the resistance zone near September’s high between 0.6685 and 0.6710. This technical strength is supported by fundamental factors, as Australia’s third-quarter 2025 inflation rate came in higher than expected at 3.2%, putting pressure on the Reserve Bank of Australia (RBA). Meanwhile, the latest U.S. non-farm payrolls data from November 2025 indicates a slowing labor market, leading to increased expectations that the Federal Reserve may consider rate cuts in 2026. This policy divergence strongly favors a stronger Australian dollar. With this outlook, we are thinking about buying call options with strike prices just above 0.6710 to profit from a possible breakout. If we break through this resistance, we could quickly move towards the next target of 0.6800. The relatively low options volatility observed through November 2025 makes this a promising strategy.

Strategic Entry Considerations

If the resistance at 0.6710 holds, a short-term pullback might give us a better entry point, with key support around the recent low of 0.6410. A cautious approach could involve using bull call spreads to reduce initial costs and manage risk. This would mean buying a call option while selling another one at a higher strike price, like 0.6870, which was a peak in June 2023. Additional confidence in this upward trend comes from recent strength in commodity markets, with iron ore prices rising nearly 10% since October due to improved demand forecasts. We saw a similar pattern in late 2020 when the Aussie dollar broke out after a sharp rise in commodity prices. If history repeats itself, this current rally could push towards the highs from mid-2024 near 0.6940. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now