AUD/USD and Global Influences The Reserve Bank wants to keep inflation steady. This affects the AUD by adjusting interest rates and using quantitative easing. Right now, the AUD/USD pair is stable around 0.6500. This is mainly due to President Trump’s softer approach to China trade policy. This positive sentiment is providing temporary support for the Australian dollar, even though the US Dollar Index is showing signs of recovery. Traders should be aware of the fragile balance between favorable comments and underlying currency pressures. APEC Summit and Economic Indicators Next month, the APEC summit in South Korea will be important, especially with a planned meeting between Trump and Xi. However, we should consider recent economic data from China. It showed Q3 2025 GDP growth at 4.8%, slightly below expectations. This could be a challenge for Australian exports, possibly overshadowing any political goodwill. Adding to the caution, iron ore prices—the key driver for the Australian dollar—have fallen to around $115 per tonne in recent Dalian exchange trades. This coincides with the Reserve Bank of Australia’s decision to maintain historically low interest rates due to global uncertainties. The RBA’s cautious approach provides little support for the currency. From a technical perspective, last week’s bearish Head and Shoulders pattern is still relevant. We are monitoring the immediate support at the weekly low of about 0.6440. If the price drops below this level, we could see it slide to multi-month support at 0.6400. Given this situation, we recommend buying put options with a strike price below 0.6440 for the next few weeks. This strategy allows for downside exposure while targeting the 0.6400 level, all while limiting potential losses. The current low volatility environment makes entering such positions relatively inexpensive. Technical Setup and Trading Strategy On the other hand, if the pair gains traction, we expect strong resistance around the 0.6550 mark, which aligns with the 50-day moving average. This could be a good opportunity for traders to sell call options or take short positions. A decisive daily close above this level would change our bearish outlook. Create your live VT Markets account and start trading now.

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