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    UOB Group analysts suggest the Australian dollar may hit 0.6660 before pulling back

    by VT Markets
    /
    Dec 10, 2025
    In the next 1-3 weeks, recent trends suggest that the Australian Dollar (AUD) may be reaching its limits. Although it hit a new high of 0.6655, the momentum did not increase significantly. This analysis remains valid unless the price drops below the strong support level of 0.6590, which would change the current outlook for the AUD.

    Alternative Strategies for Limited Gains

    With the Australian Dollar’s upward momentum fading, we should explore strategies that benefit from modest gains. The potential test of 0.6660 may provide a brief opportunity for profit, but major resistance at 0.6685 appears sturdy for now. One way to generate income is by selling call options with a strike price at or above 0.6685, betting on the likelihood that a significant breakout won’t occur in the coming weeks. This cautious view is backed by recent data. China’s latest manufacturing PMI came in at a modest 50.4, signaling that the demand for Australian commodities is not very strong right now. Additionally, the Reserve Bank of Australia’s meeting minutes from early December 2025 indicated a growing conversation around pausing rate hikes, making future AUD gains less likely.

    Factors Influencing AUD/USD

    On the other side, the US dollar is holding strong, thanks to a better-than-expected Non-Farm Payrolls report last Friday. This bolstered the Federal Reserve’s resolve to keep interest rates stable. We also saw the price of iron ore, a vital Australian export, drop slightly to $115 per tonne after failing to surpass its November 2025 highs. These elements present challenges for the AUD/USD exchange rate. Looking back to late 2023, we noticed a similar trend when the AUD/USD stalled around the 0.6800 level, proving that momentum often weakens at key resistance points. While the potential for immediate gains seems limited, the overall bullish trend remains as long as the price stays above the solid support at 0.6590. Traders might also consider selling put spreads with a strike price below 0.6590 to take advantage of stable prices and passing time. Create your live VT Markets account and start trading now.

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