The Australian Dollar (AUD) is expected to trade between 0.6700 and 0.6745 in the short term. Analysts from UOB Group see a chance for the AUD to test the resistance level at 0.6765 soon. In the last 24 hours, the AUD reached 0.6747 but did not gain enough momentum to continue rising. It is likely to move sideways today, staying within the 0.6700 to 0.6745 range.

AUD Momentum Short-Term Outlook

Over the next one to three weeks, the AUD briefly reached 0.6747 but then lost momentum. As long as the support level at 0.6680 holds, there is a possibility for the AUD to rise and reach the resistance at 0.6765. The FXStreet Insights Team shares market observations from various experts, including input from analysts and journalists. 2026-01-21T14:42:21.361Z The Australian dollar is expected to remain within a narrow range for now, but it is slowly building upward momentum. In the coming weeks, the pair may push towards the 0.6765 resistance level. This positive outlook continues as long as the strong support at 0.6680 remains intact.

Trading Strategies and Market Analysis

For derivative traders, this suggests considering cautiously bullish positions with a one-to-three-week timeframe. Buying call options with a strike price near 0.6750, expiring in mid-February, could benefit from a potential rally. This strategy allows for upside exposure while clearly defining maximum risk. Recent data shows Australia’s fourth-quarter inflation for 2025 came in slightly higher than expected at 3.6%, making an RBA rate cut less likely. Additionally, iron ore prices, a key Australian export, have stabilized above $130 per tonne, indicating steady demand from China. These factors provide a strong fundamental backdrop for the Australian dollar. On the other hand, recent US economic data has been mixed, with last week’s jobless claims slightly increasing to 210,000. This has limited the US dollar’s strength, creating more room for the AUD/USD pair to move higher. The market is currently expecting a less aggressive approach from the Federal Reserve, which benefits currency pairs traded against the dollar. Last year, a similar period of tight consolidation occurred in the fourth quarter before the pair broke higher, driven by changing sentiment around central bank policy. History shows that being patient during these sideways phases can be advantageous before the next significant move. The key level to monitor is 0.6680, which we see as a crucial support line. A clear and sustained drop below this level would cancel the current upward outlook. Traders should treat a breach of this level as a signal to exit bullish positions and rethink the market direction. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now