The AUD/USD pair is approaching its highest levels of the year as weaker US jobless claims put pressure on the USD. Technical analysis hints at possible gains, but signs of being overbought may suggest a pause. The level of 0.6707 is crucial for further increases, while dropping below 0.6600 could weaken the outlook. Currently, AUD/USD is trading around 0.6671, recovering from a low of 0.6626 during the day. The US Dollar Index is close to 98.25, reaching an eight-week low. The AUD/USD has risen since hitting 0.6421 on November 21, breaking through key moving averages.

Key Levels and Momentum

The main resistance is at 0.6707. If it breaks above this, the pair could move towards 0.6800. The support at 0.6600 is important; closing below this may indicate weakness. Even with warnings from momentum indicators, the pair might attempt to rise further. The value of the Australian Dollar depends on interest rates from the Reserve Bank of Australia, the price of Iron Ore, and the state of China’s economy. A good Trade Balance boosts the AUD, while a bad balance has the opposite effect. Market sentiment towards risk also influences the AUD’s performance. Looking back, the push toward the 0.6707 yearly peak in late 2025 faced strong resistance, as expected due to overbought signals. Now, the AUD/USD pair is consolidating around 0.6650, suggesting that bullish momentum has slowed at the start of December. This pause allows us to reassess the next move based on new economic data.

Market Reactions and Strategies

Recent US economic reports have changed the outlook. The Non-Farm Payrolls data from December 5th showed a surprising addition of 210,000 jobs in the US economy, giving some support to the US Dollar. This is a shift from the weaker jobless claims data a few weeks ago, which had boosted the Aussie. In Australia, the situation for the dollar also looks uncertain. The Reserve Bank of Australia kept rates unchanged in its last meeting but sounded more cautious about growth after Q3 2025 GDP data came in lower than expected at 0.3%. This cautious stance from the RBA weakens support for further strength in the AUD in the short term. We also need to consider external factors affecting the Aussie. Recent industrial production figures from China, Australia’s biggest trading partner, showed a slowdown, leading iron ore prices to fall back below $105 per tonne. This puts additional pressure on the commodity-linked currency and hampers its rise towards yearly highs. For the upcoming weeks, a strategy to sell call options with strike prices above the strong resistance level of 0.6707 may be wise. This would allow traders to profit if the pair stays within a certain range or declines, enabling them to take advantage of the options’ value decreasing over time. The strong resistance at that yearly peak makes it a good level for trading. On the other hand, for those predicting a deeper correction, buying put options with a strike price below 0.6600 presents a low-risk way to prepare for a downturn. If this psychological level breaks, it could signal the end of the bullish trend that began in November. Watching implied volatility is important—during a consolidation phase, selling premium could be more appealing than buying it. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now