As the AUD/USD chart indicates, the pair updated its yearly highs today, reaching levels above 0.6710. Since the beginning of December, it has risen by approximately 2.45%.
Key bullish drivers include:
→ Central bank policy divergence. While the Federal Reserve is cutting interest rates, the Reserve Bank of Australia is seriously discussing the possibility of rate hikes in 2026 (as reflected in the minutes of the latest RBA meeting).
→ Record-high gold prices. As the Australian dollar is a commodity currency, it shows a strong correlation with prices of key export commodities.
Technical analysis of the AUD/USD chart
In December, price action continued to form an ascending channel. In this context:
→ the price found support near the lower boundary between 18 and 22 December;
→ the median line regained its role as support (as indicated by the arrow).
However, bulls have a serious reason for concern.
After breaking above the September high near the 0.6707 level, a Double Top pattern appears to be forming. From a Smart Money Concept perspective, this setup may be interpreted as a bearish liquidity sweep.
Given the above, we can assume that the median line may still act as support. Nevertheless, if bears manage to seize control, the AUD/USD exchange rate could decline towards the lower boundary of the channel and attempt a downside breakout.
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