AUD/USD rose more than expected. It hit 0.7143 and ended near 0.7127. There is room to test 0.7150, but after that the risk of a pullback increases. The next resistance is 0.7175.
Despite the move higher, upward momentum is seen as largely unchanged. Support sits at 0.7105 and 0.7085.
Near Term Levels And Momentum
Over the next 1–3 weeks, the outlook stays positive as long as 0.7055 holds. An earlier “strong support” level was 0.7015.
This piece was created with an AI tool and reviewed by an editor. It is credited to the FXStreet Insights Team, which compiles market views from analysts and other sources.
In last year’s analysis, the tone was bullish for AUD/USD, with attention on a break above 0.7175. That momentum faded. Later in 2025, the key support at 0.7055 broke. Today, the market is very different, with prices trading closer to 0.6750.
The main factor is the rate gap. The Reserve Bank of Australia’s cash rate is 4.35%, while the US Fed Funds rate is higher at 5.50%. This difference supports the US dollar and limits rallies in the Aussie. Recent inflation data in both countries has been firmer than expected, which has pushed back expectations for rate cuts this year.
China And Macro Risks
China’s recovery also remains weak, which weighs on the Australian dollar. Australia’s latest trade balance showed a smaller-than-expected surplus, partly due to softer demand from key trading partners. This outside pressure makes it harder for AUD to sustain a move higher.
In the weeks ahead, AUD/USD will likely stay range-bound. Given mixed economic signals, selling option volatility may be a sensible approach. A likely trading range is 0.6650 to 0.6850.
Derivative traders may look at strategies such as selling strangles to collect premium, based on the view that the pair will stay within this band. Still, it is important to watch for surprises in central bank messaging. The next US inflation release and Australian jobs data are key events that could drive a move.
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