Forecast: AUD/USD Pushes Higher Near 0.6670 as USD Weakens and RBA Holds Rates

Earlier today, the minutes from the Reserve Bank of Australia’s (RBA) December monetary policy meeting were released, detailing the rationale behind the decision to keep the cash rate unchanged at 3.60%. Policymakers noted that third-quarter inflation came in well above the central bank’s early-autumn forecast, while monthly data for the autumn months suggest the downside trend could continue into Q4, driven by rising household income and higher unit labor costs. Board members also emphasized that aggregate demand has been running above the economy’s supply potential, which continues to underpin consumer price growth. At the same time, the labor market could return to cooling if economic activity rebounds. Against this backdrop, the RBA reforexiterated its data-dependent stance and maintained a wait-and-see approach.

The US dollar—still the primary driver for the pair—stands near 97.70 on the USDX. Since the end of last week, the greenback has been drifting lower amid rising geopolitical tensions tied to worsening conditions around Venezuela, as well as subdued expectations ahead of key releases. At 15:30 (GMT+2) today, preliminary data on the US economy for Q3 will be published. Analysts expect annualized GDP growth to slow from 3.8% to 3.3%, partly reflecting weaker durable goods orders in October, which fell from 0.5% to –1.5%, while the core measure is also seen extending its decline, easing from 0.6% to 0.3%. This negative trend has not been fully offset even by more optimistic projections for a potential recovery in the housing sector, where new home construction is expected to accelerate from 1.307 million to 1.320 million.

Support and resistance levels

On the daily chart, the instrument is approaching the resistance line of a sideways channel with fixed boundaries at 0.6700–0.6420.

Technical indicators are strengthening the buy signal: the fast EMAs within the Alligator indicator are pointing higher while maintaining distance from the signal line, and the AO histogram has printed several corrective bars in positive territory.

Resistance levels: 0.6690, 0.6800.

Support levels: 0.6630, 0.6500.

Trading scenarios and AUD/USD outlook

Long positions can be opened after the price rises and holds above 0.6690, with a target at 0.6800. Stop loss: 0.6620. Time horizon: 7 days or more.

Short positions can be opened after the price declines and holds below 0.6630, with a target at 0.6500. Stop loss: 0.6700.