AUD/USD Price Outlook: 68-Cent Break Holds as RBA Bets Clash With US Tariffs
AUD/USD is still trading around the $0.6800 mark, pushing higher with a clear bias in its favour after breaking...
Quick overview
- AUD/USD is trading around $0.6800, showing a positive bias after breaking key resistance at $0.6720-$0.6745.
- Improving Australian economic data and a softer US dollar are boosting confidence in Australia's recovery into early 2026.
- Mixed economic signals from China present external risks, with industrial production up but retail sales disappointing.
- Technically, AUD/USD remains in an ascending channel, with support at $0.6765 and resistance at $0.6830-$0.6848.
AUD/USD is still trading around the $0.6800 mark, pushing higher with a clear bias in its favour after breaking above the key resistance zone at $0.6720-$0.6745 during the European session. Even though momentum is starting to slow a bit around the $0.6810 level, the overall picture still looks pretty positive thanks to a mix of improving Australian data and a softer US dollar, largely driven by rising uncertainty in the trade department.
The latest move up isn’t just about traders’ short-term positioning. It’s telling us that a lot of people are becoming more confident that Australia’s economic recovery will keep rolling into early 2026, even though there are still some pretty big global growth risks lurking out there.
Australian Data and the RBA’s Expectations Give the Aussie a Boost
You can see that the latest data from Australia is really helping to underpin the currency. The Westpac–Melbourne Institute Leading Economic Index actually rose 0.1% month on month in December 2025, after being flat in November, which is a good sign. More importantly, the 6-month annualized growth rate actually picked up to 0.42% from 0.20%, which is reinforcing the idea that domestic momentum is starting to settle in and look a bit more stable.
This is strengthening expectations that the Reserve Bank of Australia will keep interest rates a bit tighter for longer, as inflation remains pretty sticky. And that’s helping the Aussie do a bit better against its peers, especially the US dollar, where rate-cut expectations are still quite fluid.
Mixed Messages From China Keep External Risks Front and Center
China’s latest set of numbers sent a pretty mixed signal. Industrial production rose 5.2% year on year, a bit better than in November, but retail sales grew only 0.9%, a bit of a miss. Q4 GDP actually came in slightly below expectations but still above forecast.
With the PBOC keeping its loan prime rates steady at 3% and 3.5% for 1 and 5 years, respectively, it’s actually helping to support Australia’s trade outlook a bit – although the risk for the AUD is still there due to weaker consumer demand in China.
AUD/USD Technical Outlook: Ascending Channel Still Points to Upside
From a technical perspective, AUD/USD is still in an ascending channel on the 2-hour chart. Price is still holding above that nice rising trendline from early January, and the 50 EMA is above the 200 EMA, which again confirms the bull case. The recent candles are showing smaller bodies, with the upper wicks getting pretty close to $0.6810, suggesting it’s more consolidation than actual rejection.
The levels to keep an eye on are:
- Support: $0.6765 then $0.6720-$0.6705
- Resistance: $0.6830-$0.6848
The RSI is coming in at 65-69, which is a pretty good sign of strength but not excessive. As long as $0.6765 holds, the bias remains tilted higher.
Trade idea: Buy on dips near $0.6765, target $0.6845, stop below $0.6720
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