AUD\/USD rose 0.69% on Tuesday, ending a five-day losing run and closing near 0.6900 after a rebound from about 0.6830. It was the biggest one-day rise in over a week, but it stayed below 0.7000 and remains off February highs near 0.7190.<\/p>\n
Price moved higher as risk appetite improved after reports that the White House may halt military operations against Iran, raising hopes of a diplomatic outcome in a five-week conflict. The S&P 500 gained 2.3%, while earlier pressure on the Australian Dollar was linked to higher energy costs and growth concerns.<\/p>\n
The RBA lifted rates again in March to 4.10%, while the Federal Reserve held 3.50% to 3.75%. US data weakened, with Chicago PMI at 52.8 versus 55 expected and JOLTS at 6.88 million versus 6.92 million.<\/p>\n
Markets are watching ADP (40K), retail sales (0.5% MoM), ISM (52.5), and NFP (60K) on Good Friday. On the 5-minute chart, AUD\/USD sits at 0.6900 with support at 0.6895, 0.6885, and 0.6875\/0.6870, and resistance at 0.6905, 0.6915, and 0.6925.<\/p>\n
On the daily chart, the 200-day EMA is near 0.67 and the 50-day EMA near 0.70, with resistance at 0.7020, 0.7075, and 0.7120\/0.7150. Support is at 0.6880, 0.6850, and 0.6800, with 0.6750 below that.<\/p>\n
AUD drivers include RBA policy, China\u2019s economy, inflation, growth, trade balance, and iron ore, which was $118 billion a year in 2021. The RBA targets 2\u20133% inflation and can use QE or tightening.<\/p>\n
Looking back a year ago to March 2025, we saw the AUD\/USD pair bounce sharply from the 0.6830 level. This was driven by a temporary wave of risk appetite after news of a potential de-escalation in the Middle East conflict. That move, however, stalled well short of the key 0.7000 resistance level that proved difficult to break throughout that period.<\/p>\n
The core driver back then was the growing gap in central bank policy. The Reserve Bank of Australia had just hiked its cash rate to 4.10%, signaling more to come due to inflation pressures from the energy shock. In contrast, the US Federal Reserve was on hold, citing uncertainty and setting the stage for a policy divergence that favored the Aussie dollar.<\/p>\n
That divergence played out over the rest of 2025, as we saw the RBA make one final hike to 4.35% while the Fed began a slow easing cycle, eventually bringing its funds rate down to the current 2.75% to 3.00% range. This policy gap was a significant tailwind that helped push AUD\/USD through the 0.7100 level later in the year. Now in April 2026, the situation has become more complicated, and those tailwinds are fading.<\/p>\n
One of the biggest headwinds we face now is the falling price of iron ore, a key Australian export. Prices have recently slipped to around $107 per tonne, a steep drop from the $130 levels seen just a few months ago. This reflects growing concerns about demand from China\u2019s struggling property sector.<\/p>\n
These concerns are supported by fresh data from China, which is Australia’s largest trading partner. The latest Caixin Manufacturing PMI, released just last week, fell back to 49.5, indicating a slight contraction in factory activity. This weaker outlook for Chinese growth directly weighs on the demand for Australian resources and, by extension, the Australian dollar.<\/p>\n
Here at home, inflation has cooled considerably from its 2025 peaks, with the latest quarterly CPI figure coming in at 3.4%. While this is a marked improvement, it remains stubbornly above the RBA’s 2-3% target band. This puts the RBA in a difficult position where it cannot yet consider cutting rates, but the case for further hikes is gone.<\/p>\n
Given that the favorable interest rate differential is no longer widening and commodity headwinds are building, the outlook for further AUD\/USD gains appears limited in the coming weeks. For derivative traders, this suggests that selling call spreads with strike prices above the 0.7000 psychological level could be a viable strategy. This approach would profit from the pair remaining range-bound or drifting lower as these new fundamental pressures take hold.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/USD climbed 0.69% to near 0.6900 as risk improved, watching key US data levels.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-46035","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/46035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=46035"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/46035\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=46035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=46035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=46035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}