The Australian dollar is showing increasing bullish momentum against the US dollar. Technical analysis suggests a potential breakout from its five-month range configuration is imminent.
Chart of the week: AUDUSD
Since 24 April 2025, the AUD/USD has been trading in a choppy sideways “Expanding Wedge” range configuration, as its price actions have whipsawed around its 50-day moving average.
Interestingly, the Australian dollar has shown increasing momentum over the past four weeks, tilting more firmly toward the bullish side.
Fig. 1: 1-month rolling performances of major currencies versus the US dollar as of 15 Sep 2025 (Source: TradingView)
On a one-month rolling basis, the Australian dollar has emerged as the strongest major currency against the greenback, with the US dollar falling -2.3% versus the AUD, significantly steeper than the -0.6% decline reflected in the US Dollar Index (see Fig. 1).
Let’s now focus on the latest technical elements of the AUD/USD to determine its next probable multi-week directional bias ahead of this week’s key US Federal Reserve monetary policy decision and press conference (see Fig. 2).
Fig. 2: AUD/USD medium-term trend as of 15 Sep 2025 (Source: TradingView)
Firstly, the price actions of AUD/USD have started to accelerate to the upside after its reintegration back above its 50-day moving average on 5 September 2025.
Secondly, the 4-hour RSI momentum indicator of the AUD/USD has managed to stage a rebound from its ascending support, which suggests that the bullish momentum condition remains intact.
Thirdly, the yield spread between Australia’s 2-year sovereign bond and the US Treasury note, which are more sensitive to potential changes in the RBA’s and Fed's monetary policy stances, has steadily narrowed from -0.56% on 1 August 2025 to -0.13% at the time of writing.
These latest technical elements support a potential bullish breakout on AUD/USD from its five-month “Expanding Wedge” range configuration (see Fig. 2).
Bullish bias with 0.6555 as the key medium-term pivotal support on the AUD/USD, and a clearance above the 0.6700 “Expanding Wedge” range resistance may see the next resistances coming in at 0.6760, followed by 0.6800.
On the flip side, a break below 0.6555 invalidates the bullish tone and reinstates another round of choppy corrective decline, exposing the next medium-term supports at 0.6470 and 0.6420/0.6390 (also the 200-day moving average).
