- The Australian dollar stalls near the 0.67 resistance level as the US dollar firms broadly.
- Price action suggests a possible double top and a return to range-bound, sideways-to-lower trading.
The Aussie dollar has been rather noisy during the trading session, but it is pressing up against a significant resistance barrier. The 0.67 level is an area that has yet to be conquered, and because of this, it is important to be aware that a potential double top could be forming.
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It is also worth noting that the US dollar is starting to strengthen against multiple currencies at the same time. Part of this may be because the initial reaction to the FOMC meeting was probably wrong. This is not uncommon, as markets often latch onto a narrative, chase it aggressively, and then reassess.
Range-Bound Bias and Key Support
The reality is that markets frequently pause to think about the overall attitude of the Federal Reserve and what market participants are expecting in terms of interest rate cuts. While there is an expected interest rate cut sometime during 2026, that outcome is not guaranteed and does not mean it is coming anytime soon. There are also concerns about stress in the financial system.
With a major resistance barrier at 0.67 that has held previously, the question becomes whether the market is simply settling back into a range. Most currency traders would argue that this is the norm, and it has certainly been the case for this market for quite some time, aside from the sharp selloff when Donald Trump announced massive tariffs against China in April.
Overall, this has been a grind, and most of the time it has been a sideways grind. The downside looks more likely from here, with potential support near the 0.6550 level. The price action so far suggests that the market may have reached the top of a broader consolidation pattern.
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