AUD\/USD fell about 0.5% on Monday and ended near 0.7170, after reaching an intraday low of 0.7150. This followed Friday\u2019s four-year high above 0.7225, with price moving below 0.7200.<\/p>\n
The Reserve Bank of Australia announces its rate decision on Tuesday. Futures imply about a 60% chance of a 25 basis point rise to 4.35% from 4.10%.<\/p>\n
Australia\u2019s March headline CPI rose to 4.6%, above the RBA\u2019s 2% to 3% target band. The trimmed mean CPI was 3.3%, and the March meeting vote was 5-4 in favour of a rise.<\/p>\n
In the US, Friday\u2019s Non-Farm Payrolls is expected at 60K jobs versus 178K previously, with unemployment seen at 4.3%. Tuesday brings ISM Services PMI and JOLTS, followed by ADP private payrolls on Wednesday.<\/p>\n
On the 15-minute chart, AUD\/USD was 0.7168 and below the daily open at 0.7211, with Stochastic RSI near 45. On the daily chart, price was above the 50-day EMA at 0.7061 and the 200-day EMA at 0.6816, with Stochastic RSI near 54.<\/p>\n
Looking back to this time in May 2025, we remember the Aussie dollar trading near a four-year high above 0.7200. The Reserve Bank of Australia was actively hiking rates to combat inflation that was running hot at 4.6%. The market environment felt distinctly bullish for the AUD\/USD pair, even with some short-term selling pressure.<\/p>\n
Fast forward to today, the situation has evolved significantly. While the RBA’s cash rate has been holding at 4.35% for several months, the latest Q1 2026 inflation data came in at a sticky 3.6%, keeping rate cut discussions off the table for now. This contrasts with the US, where the Federal Reserve is signaling a cautious path towards easing later this year.<\/p>\n
The US labor market, which we expected to add only 60,000 jobs in May 2025, has proven more resilient over the past year. The most recent Non-Farm Payrolls report for April 2026 showed a solid 175,000 jobs were added, with unemployment at a low 3.9%. This continued strength in the US provides underlying support for the US dollar, creating a headwind for the Aussie.<\/p>\n
Given that AUD\/USD is now trading around 0.6650, far below the 0.7060 support level from last year, we see a range-bound market. Selling out-of-the-money call options with strike prices near 0.6800 could be a prudent way to collect premium, as significant upside seems capped by the policy differences. Implied volatility for one-month options is hovering near 8.5%, offering a reasonable return for taking on this defined risk.<\/p>\n
Alternatively, for those concerned about a sudden downturn, buying put options can provide a hedge against a break below the year-to-date lows. A drop could be triggered if upcoming US data forces the Fed to delay its easing plans further, strengthening the dollar. A put spread could be an effective, lower-cost strategy to protect against such a move while we wait for clearer direction from either central bank.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/USD slipped to 0.7170 ahead of RBA decision; markets price hike as US jobs data looms.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[33],"tags":[],"class_list":["post-46362","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t