AUDUSD has been mostly flat since the beginning of the month, but the seeds of an upside move in 2026 might already be planted. 

Australia is heavily dependent on commodities, with rich mines and high agricultural production. From rare earths to copper, when commodity prices rise and global manufacturing booms, the Australian economy and the Australian dollar are expected to be positively influenced. 

(Bloomberg Commodity Index) 

The Bloomberg Commodity Index, which is calculated from 20 commodities including gold, silver, oil, and copper, is on the rise. The index has finally broken the 109 resistance that has been holding back upside moves since 2023, despite falling oil prices. 

In 2026, after the first quarter, the dollar index is expected to drop further, which is certainly positive for both the commodity index and AUDUSD. Also, Australia’s economic growth is expected to recover in 2026 and 2027, which will be in line with our forecast. 

There is a chance that both precious metals and oil could lose ground in 2026, but it possibly will not trigger a widespread commodity retreat and might even help the base metals. 

AUDUSD

AUDUSD already broke out of the five-year downtrend in December and has formed a conservative uptrend channel since the start of 2025. Within the trend, a calm upward move is likely to continue in 2026 as well. If we see a USD rally in the first quarter, AUDUSD is likely to retest the broken long-term trend together with the lower line of the upward trend channel. That could create a buying opportunity as long as there is no significant breach of 0.65.