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    UOB analysts expect the Australian dollar to fluctuate between 0.6445 and 0.6555.

    by VT Markets
    /
    Oct 23, 2025

    Short Term Range Expectations

    In the next one to three weeks, we expect the AUD/USD currency pair to trade sideways within the range of 0.6445 to 0.6555. This forecast aligns with recent updates from FX analysts. The pair is entering a consolidation phase and is likely to remain between 0.6445 and 0.6555. This means that making aggressive trades may be challenging, so it’s better to focus on strategies that work well within this range. In the immediate short term, we anticipate an even narrower band between 0.6475 and 0.6510. This outlook is backed by recent economic data from both Australia and the United States. Earlier this month, the Reserve Bank of Australia kept its cash rate steady at 4.35%, and the latest inflation report showed a CPI of 3.4%. This indicates the RBA is in a holding pattern. Similarly, the US Federal Reserve is also staying put, with core inflation at 2.7%, leaving little reason to change their policies soon.

    Derivative Trading Strategies

    Since both central banks are taking a cautious approach, a major event that might break this range seems unlikely in the short term. Implied volatility for one-month AUD/USD options has dropped to around 8.5%, indicating calm market conditions. This lower volatility makes selling options an appealing strategy. For derivative traders, this market environment is ideal for using an iron condor strategy. By selling a call spread above the 0.6555 resistance and selling a put spread below the 0.6445 support, we can profit from time decay. The goal is for the currency pair to stay within these levels until the options expire. We’ve seen this trend before, especially in mid-2024 when the pair was confined to a similar tight range for several weeks. During that time, strategies that benefitted from low volatility and time decay worked well. The current market setup suggests that we could see a similar situation unfold again. Create your live VT Markets account and start trading now.

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