AUD/USD traded in a narrow range near 0.7075 during Wednesday’s European session. Markets are awaiting the FOMC minutes due at 19:00 GMT and Australia’s January jobs figures on Thursday.
Ahead of the minutes, the US Dollar Index (DXY) rose 0.2% to about 97.30. The minutes are being watched for clues on the Federal Reserve’s policy direction.
Key Labor Data In Focus
Australia’s data is forecast to show 20K new jobs in January, down from 65.2K in December. The unemployment rate is seen at 4.2%, up from 4.1%.
Earlier this month, the Reserve Bank of Australia lifted the Official Cash Rate by 25 basis points to 3.85%. Further tightening was left on the table.
On the daily chart, AUD/USD was flat around 0.7075, with the 20-day EMA rising and sitting at 0.6999. The 14-day RSI read 64 after moving down from overbought levels.
Support is seen near the 20-day EMA at 0.6999. A break above the three-year high around 0.7150 may open the way to 0.7200, while a daily close under the EMA could weaken momentum.
How Traders May Be Positioned
Australia’s seasonally adjusted Employment Change tracks the monthly shift in employed people. Higher readings can support the Australian Dollar, while lower readings can weigh on it.
We are seeing a familiar pattern in the AUD/USD, though the context is much different today, February 18, 2026. The current spot price is hovering around 0.6750, a significant shift from the bullish sentiment we saw this time last year. This highlights a change in underlying economic conditions for both Australia and the United States.
Looking back to early 2025, the pair was trading confidently above 0.7000, supported by an established uptrend and a hawkish Reserve Bank of Australia that had just hiked rates to 3.85%. At that time, we were anticipating Australian employment data, with forecasts suggesting a slowdown that could challenge the Aussie’s strength. The market was positioned for continued RBA tightening, making dips in the currency pair attractive buying opportunities.
The employment report for January 2025 ultimately surprised many, coming in much stronger than the forecasted 20,000 jobs and pushing the AUD/USD through the 0.7150 resistance level. This outcome reinforced the prevailing bullish trend, rewarding traders who had bought call options or held long positions through the data release. It was a clear lesson that in a strong uptrend, positive data surprises can have an outsized impact on price.
Today, the situation has evolved, as central banks globally have shifted their stances. The RBA’s official cash rate is now at 3.10% after a series of cuts in late 2025 aimed at supporting a slowing economy. Meanwhile, the US Federal Reserve has also begun a modest easing cycle, with its benchmark rate now at 4.75% as inflationary pressures have cooled.
Recent statistics add to this cautious outlook, making the bullish case from a year ago seem distant. Australia’s unemployment rate for January 2026 ticked up to 4.5%, and recent industrial production data from China, a key trading partner, has shown a noticeable slowdown. These figures provide a sharp contrast to the economic optimism that was driving the Australian dollar higher in early 2025.
Given this context, derivative strategies should adjust accordingly. Instead of buying dips as we did last year, traders might consider using rallies toward the 0.6800 level as opportunities to purchase put options or establish bearish put spreads to hedge against further downside. Selling call options with strike prices near key resistance points could also be a viable strategy to capitalize on what we expect to be limited upside momentum.
