The Australian Dollar (AUD) might test the 0.6670 level, but it’s unlikely to drop to the major support at 0.6655. Current price trends indicate a trading range between 0.6655 and 0.6745, as noted by UOB Group’s FX analysts. ### Recent Price Movements In the last 24 hours, the AUD rose to 0.6722 but fluctuated between 0.6673 and 0.6727, closing at 0.6681, down 0.43%. Although there’s potential for the AUD to reach 0.6670, it likely won’t drop below 0.6655. Resistance is at 0.6700 and then at 0.6715. ### Current Trading Pattern From last Friday’s analysis, we see the AUD continuing to trade within the 0.6655 to 0.6745 range. This outlook remains in place. Insights come from the FXStreet Insights Team, who gather market observations from various experts. Right now, the Australian dollar is trading in a narrow channel, similar to patterns seen at this time last year. This suggests a consolidation phase where neither buyers nor sellers dominate. For traders, this environment suggests using strategies that benefit from low volatility. Looking back to early 2025, the AUD/USD pair stayed within the range of 0.6655 and 0.6745 for several weeks before a significant rally in February. This history shows that quiet times often lead to major price movements. Traders should keep an eye out for signs of a potential breakout from the current range. The current fundamental situation supports this tight range. Recent data indicates U.S. core inflation at 3.4%, creating uncertainty about the Federal Reserve’s next steps. Meanwhile, inflation in Australia for the last quarter of 2025 was 3.9%, leading the Reserve Bank of Australia to hold its policy steady. This central bank stalemate is keeping the currency pair stable. ### Derivative Strategies In the coming weeks, selling options to collect premiums seems like a good strategy. One could consider implementing a short strangle with strikes outside the expected 0.6655 to 0.6745 range. This approach profits from the lack of movement in the pair and the time decay of option values. It aligns with the expectation that the market will remain range-bound for now. However, lessons from 2025 remind us to be cautious, as the range eventually broke upward. Any derivative positions should be managed with strict risk controls, as unexpected economic data could lead to sharp price moves. Current low implied volatility makes protective options relatively inexpensive to buy as insurance against sudden changes. Create your live VT Markets account and start trading now.

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