AUD/USD Weakens Toward 0.6420 Amid Rising Geopolitical Tensions

Last night, U.S. President Donald Trump accused the Venezuelan government of harboring individuals convicted of drug trafficking crimes and stated that he expects military action to begin in that country. U.S. Air Force bombers were reportedly spotted near Venezuela’s borders. Following such statements, the U.S. dollar traditionally strengthens — over the week, it has gained 0.53% in the USDX index.

Meanwhile, according to the Reserve Bank of Australia’s (RBA) October economic bulletin, the development of the critical minerals sector will be slow and marked by high uncertainty, as long-term projects face financing challenges and remain highly dependent on global demand and price fluctuations. The share of these resources in Australia’s exports remains small, and their contribution to the trade balance is still limited. The report notes that expectations for rapid export income growth are weakening, exerting moderate pressure on the national currency.

Additionally, the ongoing escalation of the U.S.–China trade conflict has intensified after Washington imposed restrictions on the export of equipment and software to China, and Beijing responded by tightening control over the supply of rare-earth metals critical for electronics and green technologies. Officials from both nations are meeting in Malaysia to prepare for the Asia-Pacific Economic Cooperation (APEC) summit, where a meeting between President Donald Trump and Chinese leader Xi Jinping is scheduled for October 30. If the parties reach a consensus, geopolitical tensions may ease, supporting risk assets, including the Australian dollar. Otherwise, the AUD/USD pair could drop toward 0.6420 and 0.6370.

Support and Resistance Levels

The long-term trend remains bullish; however, during the current correction, the pair broke below the 0.6535 support level and is heading toward 0.6420 and 0.6370. If the 0.6420 level holds, the long-term uptrend may resume toward 0.6535, 0.6620, and 0.6703 (September high).

In the medium term, the trend also remains upward. In September, the price reached zone 4 (0.6700–0.6677) before reversing toward the 0.6487–0.6465 support area, where long positions became relevant with targets at 0.6586 and 0.6707. However, if the pair falls below 0.6487–0.6465, the trend will shift bearish with targets near zone 2 (0.6267–0.6245).

Resistance levels: 0.6535, 0.6620, 0.6703.

Support levels: 0.6420, 0.6370, 0.6200.

Trading Scenarios and AUD/USD Forecast

Short positions can be opened from 0.6530 with a target of 0.6420 and a stop loss at 0.6561. Implementation period: 9–12 days.

Long positions can be opened above 0.6561 with a target of 0.6620 and a stop loss at 0.6533.