AUD\/USD traded near 0.6910 during Asian hours on Monday, after two days of losses. The daily chart shows the pair remains in a descending wedge, with lower highs and lower lows narrowing, which can point to easing selling pressure and a potential upside break.<\/p>\n
The 14-day RSI is near 43, which keeps the tone bearish. The pair is also below the nine-day EMA and the flatter 50-day EMA, adding to the near-term downside bias.<\/p>\n
Support is at the 11-week low of 0.6833, set on 30 March, followed by the wedge floor near 0.6810. If price breaks below the wedge, focus may shift towards the 0.6400 rebound support zone.<\/p>\n
Resistance sits at the nine-day EMA of 0.6918, then the 50-day EMA at 0.6958 near the wedge top. A sustained break above this area may open a move towards 0.7187, the highest level since June 2022, reached on 11 March.<\/p>\n
We recall watching this exact setup back in March 2025, where the AUD\/USD was coiling within a descending wedge around the 0.6900 level. The conflicting signals from the RSI and the moving averages at that time created significant uncertainty for the pair’s direction.<\/p>\n
That pattern ultimately resolved to the downside later in 2025, with the pair breaking below the 0.6810 wedge support and eventually finding a floor near the 0.6450 level in the fourth quarter. The bearish momentum we saw a year ago played out as concerns over global growth weighed on the Aussie dollar. We have since seen a slow grind higher, bringing us to today’s price of around 0.6750.<\/p>\n
Looking at today, April 6, 2026, the key driver is now central bank policy divergence. The latest Australian CPI data for March 2026 came in at a stubborn 3.1%, keeping the Reserve Bank of Australia hesitant to signal any rate cuts. Meanwhile, U.S. inflation has cooled to 2.8%, prompting Federal Reserve officials to guide the market towards a possible rate cut in the third quarter.<\/p>\n
This divergence in policy suggests potential strength for the AUD relative to the USD in the coming months. Therefore, buying out-of-the-money call options could be a prudent strategy to capture this expected upside with limited risk. For example, traders could look at June 2026 calls with a strike price of 0.6850.<\/p>\n
Conversely, downside risks from slowing Chinese industrial demand, which has kept iron ore prices from rallying, cannot be ignored. To hedge against a sudden drop, purchasing put options with a 0.6600 strike for May 2026 would offer protection. This strategy becomes more attractive if the pair fails to break above the recent resistance at 0.6780 this week.<\/p>\n
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