The Australian Dollar (AUD) is likely to trade between 0.6510 and 0.6560 in the short term, according to analysts at UOB Group FX. Over a longer period, the range could expand to 0.6490 to 0.6580. Recently, the AUD reached 0.6580 before dropping to 0.6514, indicating mixed trends. In the next 24 hours, the AUD may continue to move between 0.6510 and 0.6560 despite earlier upward moves. The AUD tested 0.6580 previously but closed at 0.6531. There is no strong momentum in either direction, so the expectation remains for the AUD to stay within the 0.6490 to 0.6580 range.

Analyst Insights

This analysis comes from the FXStreet insights team, which gathers expert observations. They focus on both external and internal analysts to provide market insights and notes. Looking ahead, we predict the AUD/USD pair will trade sideways over the coming weeks. The important range to monitor is between 0.6490 and 0.6580. The recent inability to keep a rally above 0.6580 shows there isn’t enough buying pressure for a new upward trend. Recent Australian inflation data further supports this view. The quarterly Consumer Price Index (CPI) eased to 3.1%, slightly below market expectations. This reduces the pressure on the Reserve Bank of Australia to raise rates further and limits the potential of the AUD. Therefore, the resistance level at 0.6580 is likely to hold firm.

Economic Influences

On the US side, recent labor market data showed that Initial Jobless Claims rose to 235,000, reaching a three-month high. This suggests a cooling US economy, which may weaken the US dollar. This situation should provide good support for the AUD/USD pair around the 0.6490 mark. For derivative traders, this environment is favorable for low volatility strategies, such as selling strangles with strike prices set outside the 0.6490/0.6580 range. This strategy benefits from time decay as long as the AUD/USD pair stays within bounds. It’s important to manage risks carefully, including placing stop-loss orders to guard against sudden price movements. A similar situation occurred in late 2023 when expectations surrounding central banks were also shifting. During that time, the AUD/USD traded within a defined range for several months. This history suggests that, barring any major economic surprises, sideways movement is the most likely scenario ahead. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now