AUD/USD Forecast: Australian Dollar hits fresh 2025 highs, aims to extend the advance

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6658

Dismal Chinese data temporarily weighed on the Aussie at the beginning of the week.
Market participants drop the US Dollar ahead of the Federal Reserve’s announcement.
AUD/USD aiming to test sellers’ strength around the 0.6700 threshold.

The AUD/USD pair surpassed its 2025 high by a handful of pips, running past 0.6670 on Monday amid broad US Dollar (USD) weakness. The Greenback extended its slide at the beginning of the new week, as market players bet on an upcoming interest rate cut in the United States (US), with stocks advancing with hopes of easing borrowing costs.

The pair fell during Asian trading hours, bottoming at 0.6638 on the back of dismal Chinese data weighing on the Aussie. China reported that Industrial Production rose at an annualized pace of 5.2% in August, below the previous 5.7% and missing the expected 5.8%. Retail Sales in the same period gained 3.4%, below the expected 3.8% and the 3.7% posted in July.

The pair recovered as investors dumped the USD throughout the second half of the day, with not much behind the decision, but the upcoming Federal Reserve (Fed) monetary policy decision on Wednesday.

Data-wise, the US will release August Retail Sales on Tuesday, while Australia has no data scheduled until Wednesday, when the country will release the August Westpac Leading Index.

AUD/USD short-term technical outlook

The daily chart for the AUD/USD pair shows it hovers around 0.6670, while maintaining the positive bias. The Momentum indicator consolidates well above its 100 line, while the Relative Strength Index (RSI) indicator advances near overbought readings, aiming to extend its advance. At the same time, the pair is trading above all its moving averages, with the 20 Simple Moving Average (SMA) picking up above the longer ones, currently at around 0.6540.

Technical readings in the 4-hour chart support another leg north for AUD/USD. The pair recovered quickly after briefly piercing a bullish 20 SMA, now providing dynamic support at around 0.6640. At the same time, the 100 SMA accelerated north roughly 100 pips below the shorter one while above the 200 SMA, reflecting increased buying interest. Finally, technical indicators seem to have lost their upward strength but hold near overbought readings, not enough to suggest upward exhaustion.

Support levels: 0.6640 0.6590 0.6550

Resistance levels: 0.6700 0.6730 0.6775

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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