Buying AUDUSD as dollar gets weaker

The AUDUSD pair is pushing higher, reaching its strongest in two weeks. The main story behind this move is simple: the American dollar is getting weaker. Soft economic reports—like the ninth consecutive month of shrinking US factory activity—have everyone talking about a potential Federal Reserve (Fed) rate cut in December, which is taking the shine off the greenback.

This dovish shift for the regulator is gaining steam, partly due to political changes back at home. The new frontrunner Fed Chair is seen as more likely to favor lower rates, sparking some concerns over the central bank's independence and the dollar's long-term health. For now, it just means more pressure on the greenback as investors seek better returns elsewhere, particularly in other countries.

On the flip side, the Aussie is getting a boost from its own strong economic numbers. A big jump in government spending and business activity last quarter (Q3) points to solid GDP growth, keeping inflation worries alive and forcing traders to rethink how long the Reserve Bank of Australia (RBA) can stay on hold.

With the regulator all but certain to leave borrowing costs unchanged, the gap between Australian and US bond yields is growing. This makes the Aussie look even more attractive to market players.

Looking at the charts, AUDUSD has been trending up nicely since November 21. However, things might be getting a little overheated. The Stochastic Indicator is now near 76, thus falling into overbought territory. Sometimes that just means the trend is powerful, but the Chaikin Oscillator has also started to dip—a sign that buying momentum is slowing down a bit. So while the overall direction is still bullish, the pair might be due for a small pullback first.

Consider the trading strategy down below:

Buy AUDUSD during corrections to 0.64990 within the uptrend. Take profit: 0.65800. Stop loss: 0.64750.

This forecast is relevant between December 2 and December 8, 2025.