**AUD/USD Forecast: Analysis and Outlook (as referenced in the original analysis by Henry O’Shea, FXStreet via Mitrade)**
**Introduction**
The Australian dollar against the US dollar (AUD/USD) is one of the most actively traded currency pairs globally, reflecting not only the relative health of the Australian and US economies but also risk sentiment on a broader international scale. In this in-depth analysis, we explore recent movements, fundamental drivers, and technical outlooks for AUD/USD. This review draws on insights provided in the original FXStreet article, augmented with relevant commentary and data from broader financial coverage.
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## Current Overview and Recent Price Action
– AUD/USD has experienced significant volatility in the wake of shifting risk appetite, changes in commodity prices (notably iron ore), and updates on monetary policy from both the Reserve Bank of Australia (RBA) and the Federal Reserve.
– As of mid-October 2025, AUD/USD is trading in a consolidative fashion, with key support and resistance levels coming into play as market participants reassess global inflation trends, economic growth prospects, and central bank rhetoric.
– The currency pair has displayed a somewhat range-bound tendency, fluctuating near longer-term averages, as investors weigh the likelihood of future rate adjustments.
**Key Drivers Influencing AUD/USD Movement**
### 1. Federal Reserve Policy and US Dollar Index
– The US Federal Reserve’s tone, via recent FOMC meeting minutes and statements from Chair Jerome Powell, has remained vigilant on inflation, with market expectations for interest rate cuts shifting later into 2025.
– The “higher for longer” narrative for US interest rates continues to put upward pressure on the US dollar, often capping AUD/USD rallies.
– US economic data, such as retail sales and jobless claims, remain closely watched for signs that may affect the Fed’s policy trajectory.
### 2. Reserve Bank of Australia Policy
– The RBA has maintained a relatively cautious stance, balancing concern over persistent services inflation with signs of slowing household spending and a declining property market.
– Recent speeches by RBA officials suggest that while the tightening cycle may have ended, the central bank remains data-dependent, leaving the door open for potential further monetary action if inflation proves sticky.
– The Australian economy’s heavy reliance on resource exports, especially to China, means that the RBA’s policy is also informed by external demand dynamics.
### 3. China’s Economic Performance
– As Australia’s largest trading partner, China’s import demand for commodities like iron ore significantly impacts the Australian dollar.
– Recent Chinese economic data, including GDP growth figures and industrial output, have provided mixed signals. While stimulus measures have attempted to revive growth, the property sector’s continued struggle has kept a lid on optimism.
– Any material improvement in Chinese activity, especially in construction and infrastructure, usually supports AUD strength.
### 4. Commodity Prices
– The movement of iron ore, coal, and LNG prices directly influences AUD/USD.
– Iron ore prices have
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