The Australian Dollar (AUD) is expected to stay between 0.6510 and 0.6560, according to analysts. Over a longer period, the forecast is for the AUD to range from 0.6490 to 0.6580. Recent market analysis showed a mixed outlook for the AUD. It fell to 0.6504 but then rose to 0.6551. The AUD closed at 0.6537, which is an increase of 0.09%, and still falls within the predicted range of 0.6510 to 0.6560.

FXStreet Insights Team

The FXStreet Insights Team gathers market analyses from various experts, providing a wide range of information about forex trends. Their content addresses different economic indicators and changes in market dynamics. Readers should keep in mind the risks associated with market investments. Thorough research is crucial, as markets can change quickly, and trading may lead to financial losses. The analyses offered are for informational purposes and should not be considered direct investment advice. We believe that the Australian dollar will likely remain in a tight trading range for one to three weeks. Key levels to monitor include support around 0.6490 and resistance near 0.6580. The unclear trend suggests that taking aggressive bullish or bearish positions might not be profitable.

Central Bank Actions

This outlook is backed by recent actions from central banks. The Reserve Bank of Australia has adopted a “wait-and-see” stance, while last week’s US inflation data matched expectations at 2.9%, leaving the Federal Reserve with no impetus to act. This inaction helps to stabilize the currency pair within its current range. Commodity prices also play a role in this stability. After significant fluctuations earlier this year, iron ore prices have stabilized around $115 per tonne, giving steady support to the Aussie dollar. We do not anticipate any major developments in the commodity markets that could push the AUD/USD outside its range in the short term. For derivative traders, this environment suggests strategies that benefit from low volatility. Selling options premium through methods like an iron condor can be effective. This involves placing short strikes outside the expected 0.6490 to 0.6580 range, aiming to profit as prices stay within these limits until expiration. Implied volatility on AUD/USD options has dropped to multi-month lows, recently reaching 8.5%. This makes selling options more appealing than it was during the more turbulent rate hikes of 2024. However, we should remain alert, as unexpected economic data from either the US or China could disrupt this calm. Create your live VT Markets account and start trading now.

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