The Australian Dollar (AUD) is currently on a downward trend, but it is unlikely to fall to the key support level of 0.6655. Analysts at UOB Group indicate that the currency is entering a phase of range trading, where it will likely fluctuate between 0.6655 and 0.6745. In the last 24 hours, the AUD was expected to test the 0.6670 level but showed limited downward movement. The AUD climbed to 0.6702 before dropping to 0.6673, closing almost unchanged at 0.6683, which is a slight increase of +0.02%. Today’s support levels are at 0.6665, with resistance at 0.6690 and 0.6705; the major support level is not expected to be tested.

Range Trading Phase

In the next one to three weeks, the AUD is predicted to stay within the range of 0.6655 to 0.6745. Recent trading has been rather calm, supporting the idea of continued range-bound activity in the short term. Journalists from the FXStreet Insights Team compile market insights from experts, combining both external and internal analysis. Looking back at our analysis from last year, in January 2025, we expected the Australian dollar to remain in a range. We anticipated that AUD/USD would trade quietly between 0.6655 and 0.6745. This view held for a few months, but circumstances changed dramatically in the latter half of the year. The anticipated range was broken as the US Federal Reserve took a hawkish stance due to stubborn inflation, which hovered around 3.2% in the last quarter of 2025. This difference in rates, especially as the Reserve Bank of Australia shifted to a neutral policy, put constant pressure on the currency pair. The strength of the US dollar became a significant factor, driving the AUD lower. Additionally, economic data from China, a crucial trading partner for Australia, was weaker than expected. Manufacturing PMI figures consistently declined to 49.5, indicating a contraction that pressured commodity prices. This situation provided minimal support for the AUD, and the crucial support level of 0.6655 was broken in September.

New Trading Strategies

Today, the previous support level of 0.6655 has turned into a major resistance point. The currency pair now operates in a new, lower range, with the market stabilizing around 0.6500. We are shifting our focus from range-trading strategies to recognizing the current bearish trend. In the coming weeks, traders dealing in derivatives may want to adopt strategies that take advantage of this new situation. For instance, selling call spreads with a ceiling around the 0.6650 resistance level could be a smart way to profit from the unlikelihood of a return to the old range. This strategy allows profit if the pair stays below this key level. On the other hand, for those expecting more weakness, buying put spreads could provide a defined-risk opportunity for a move toward the 0.6450 level. Given the ongoing fundamental challenges, we view rallies as chances to sell instead of signals for a new upward trend. Since the range has broken, volatility has increased, so it’s important to price options carefully. Create your live VT Markets account and start trading now.

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