AUD/USD slipped to a one-and-a-half-week low near 0.7140 in Monday’s Asian session, but selling lacked follow-through. The pair traded just above the mid-0.7100s, down nearly 0.25% on the day, as last week’s US inflation data reinforced expectations of a Federal Reserve rate rise later this week, while US–Iran tensions and clashes in the Strait of Hormuz supported the US Dollar. Expectations for a hawkish Reserve Bank of Australia stance tempered the decline.
Technically, last week’s break below the 100-period SMA on the four-hour chart shifted the bias lower, though price held beneath the 23.6% Fibonacci retracement at 0.7150 and the RSI hovered near 30, pointing to oversold conditions. MACD remained negative. A sustained move under 0.7150 would expose the 38.2% Fibo. at 0.7095 and then the 50% retracement at 0.7051, while resistance stood at the 100-period SMA around 0.7179, followed by the recent cycle high near 0.7239.
Mid-September 2026: Strategic Outlook and Trading Levels
As we navigate the middle of September 2026, derivative traders should approach the AUD/USD pair with tactical caution. The pair’s recent climb to the mid-0.7100s marks a significant recovery from the 0.6500 lows seen throughout 2024 and 2025. However, we are now seeing immediate downward pressure as spot prices test the key 0.7150 support level.
To trade this effectively in the coming weeks, we recommend watching the 23.6% Fibonacci retracement level closely. Because the daily Relative Strength Index (RSI) is hovering near 30, a sudden, sharp breakdown is less likely than a slow, grinding slide. Traders looking to short the pair should wait for a confirmed daily close below 0.7150 before targeting the 38.2% Fibonacci level at 0.7095.
Fundamental Drivers and Positioning Advice
On the fundamental side, recent economic data continues to pressure the Australian dollar. The latest US inflation figures showed consumer prices rising faster than expected, which has revived market expectations for an imminent Federal Reserve interest rate hike. Furthermore, rising safe-haven demand due to persistent geopolitical tensions in the Middle East is providing a strong tailwind for the US dollar.
We must also weigh this against a hawkish Reserve Bank of Australia (RBA), which is keeping domestic rates elevated to combat sticky services inflation. This policy divergence is likely to cushion the Aussie’s fall, preventing a complete collapse back to last year’s lows. Therefore, we suggest using options strategies, like bear put spreads, to protect against a moderate downside without overexposing capital to a sudden reversal.
On the upside, any bullish recovery will face heavy resistance at the 100-period Simple Moving Average near 0.7179. Unless we see a sustained breakout above the cycle high of 0.7239, the prevailing bias remains bearish. We advise keeping position sizes small and using tight stop-losses just above these key resistance levels to manage risk.
