**AUD/USD Outlook: Setting Fresh 2025 Highs as Bulls Target Channel Break Ahead of CPI Test**
*Compiled and expanded by [Your Name], drawing from insights by Matt Weller, CFA, CMT*
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### Introduction
The AUD/USD currency pair has recently garnered significant attention as it tests new highs for 2025, powered by a confluence of positive technical and macroeconomic signals. In the evolving landscape of the forex market, traders are now laser-focused on whether the Australian dollar can sustain its momentum and break out above a critical bearish channel just before the release of critical US Consumer Price Index (CPI) data. Understanding the dynamics at play is crucial for navigating the next moves in this popular major pair.
This comprehensive outlook explores the driving forces behind AUD/USD’s surge, assesses the technical setup, examines key macroeconomic factors on the horizon, and offers insights on potential scenarios resulting from forthcoming economic data. The original analysis and technical perspective are attributed to Matt Weller, CFA, CMT, with supplemental information drawn from recent market commentaries and official data.
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### Overview: AUD/USD’s Recent Performance
#### Key Highlights
– AUD/USD reached its highest level since 2025, climbing above the psychological resistance near 0.6750.
– Year-to-date gains have outpaced several G10 counterparts, highlighting the Australian dollar’s relative strength.
– The rally coincides with increased appetite for risk assets globally, a weaker US dollar, and hopes for dovish policy pivots by the US Federal Reserve.
#### What’s Driving the Pair Higher?
– **US Dollar Weakness:** Broad-based softness in the greenback, resulting from revised rate-cut expectations and softer recent US data.
– **Commodity Rebound:** Recovery in key Australian exports, such as iron ore and metals, buoyed by resilient Chinese demand and hopes for renewed policy stimulus from Beijing.
– **Australian Economic Data:** Local labor market strength and above-target inflation readings, keeping expectations of Reserve Bank of Australia (RBA) hawkishness alive.
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### Technical Analysis: Charting the AUD/USD Rally
#### Price Action Overview
– AUD/USD has now touched areas last seen in the middle of 2024.
– The pair’s strong bid higher has brought it to the top of a well-defined, multi-month downward channel.
– For bullish continuation, a clear break and daily close above the channel resistance is pivotal.
#### Key Technical Levels to Watch
– **Resistance:**
– 0.6760-0.6780: Immediate overhead barrier (current channel top and prior swing highs).
– 0.6800-0.6850: Psychological milestone and next area of potential supply.
– 0.6900: Multi-month resistance, marking the scene of repeated bull failures from 2023 and 2024.
– **Support:**
– 0.6700: Recent breakout point and round-number support.
– 0.6660:
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