The Australian Dollar rose against the US Dollar on Tuesday as the US Dollar weakened ahead of a deadline set by US President Donald Trump for Iran to reach a deal or reopen the Strait of Hormuz by 8:00 p.m. Eastern Time (00:00 GMT on Wednesday). AUD\/USD was near 0.6955, up about 0.54% on the day. <\/p>\n
The US Dollar Index (DXY) traded around 99.80 after failing to hold above 100. The Australian Dollar also gained support from a firmer Chinese Yuan after the People\u2019s Bank of China set the daily reference rate at 6.8854, its strongest level in nearly three years. <\/p>\n
On the daily chart, AUD\/USD rebounded after holding above the 100-day Simple Moving Average at 0.6842. The pair is testing 0.6950, a prior support level that is now acting as resistance. <\/p>\n
A move above 0.6950 could bring 0.7000 into view, close to the 50-day SMA at 0.7024. If the pair closes below the 100-day SMA, the next area in focus is 0.6700, described as a previous breakout zone. <\/p>\n
The RSI has moved back towards 50. MACD remains slightly below its signal line but is rising towards zero, while the histogram is narrowing.<\/p>\n
Looking back at the analysis from 2025, we see a market that was far more optimistic on the Aussie. Today, the US dollar is significantly stronger, with the US Dollar Index holding firm around 105.50, a stark contrast to the sub-100 levels seen back then. This has been a primary driver keeping AUD\/USD suppressed below the 0.6600 handle in recent weeks.<\/p>\n
The Australian dollar is also feeling pressure from its role as a proxy for China’s economy. Unlike the strong Yuan fixing we saw in 2025, recent data has been more mixed and has failed to provide a significant tailwind. The latest Caixin Manufacturing PMI for March 2026, for example, came in at 50.9, a slight cooling which has tempered enthusiasm about the recovery’s momentum.<\/p>\n
From a technical standpoint, the pair is now contained within a much lower range, with key support found near the 0.6510 level and stiff resistance at the 50-day SMA around 0.6640. For derivative traders, this suggests that buying puts with a strike price below 0.6500 could serve as effective portfolio insurance against a potential break lower. Selling out-of-the-money call options above 0.6700 could be a strategy to generate income, banking on that ceiling holding firm.<\/p>\n
The Reserve Bank of Australia\u2019s decision to hold interest rates steady at its April 2026 meeting, citing persistent services inflation, has further contributed to this range-bound action. With Australian annual inflation last reported at 3.4%, the RBA is in a holding pattern, which tends to cap significant upside for the currency. This environment suggests implied volatility may stay relatively low, making long-dated options strategies less appealing for now.<\/p>\n
We must watch for catalysts that could break the current stalemate, particularly the next US Non-Farm Payrolls report. A stronger-than-expected jobs number could reinforce the “higher for longer” Federal Reserve narrative, potentially sending AUD\/USD to test the 0.6450 support zone we saw late last year. Any unexpected weakness in US data, however, could spark a short-covering rally back toward that 50-day moving average.<\/p>\n
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