The AUDUSD shows a bearish trend with the price moving below the 100- and 200-bar moving averages, positioned between 0.6528 and 0.65399 on the 4-hour chart. This resistance zone keeps sellers in control as long as the price remains beneath it.
The existing channel structure is intact, and recent movements align with this pattern. On the downside, there is buyer activity in the 0.6484 to 0.6502 area, which has supported the pair multiple times recently, despite a short-lived break below it.
Potential Downside Movement
A definitive break under 0.6484 could weaken the technical position, potentially moving towards key support at the channel trendline of 0.6462, and then to 0.6407. For bullish sentiment to gain strength, the price needs to surpass the moving averages of 0.6528 and 0.6539. Until then, sellers maintain an edge within the broader trading range.
We are watching the AUD/USD closely as sellers are currently in control below the 0.6539 level. The price is struggling to get back above its key moving averages, which suggests a downward path is more likely in the near term. This keeps our immediate outlook cautious to bearish.
This view is supported by recent data showing the US jobs market remains unexpectedly strong, with the latest Non-Farm Payroll figures surprising to the upside. At the same time, iron ore prices, a crucial Australian export, have softened to around $105 per tonne, down from earlier highs. This combination of a robust US dollar and weakening commodity fundamentals reinforces the bearish case.
Derivative Trading Strategies
For derivative traders, this suggests considering put options in the coming weeks, especially on any small rallies. A firm break below the established support at 0.6484 would be a key trigger for us. We would then look toward strike prices near the next support levels of 0.6462 and even 0.6407.
Alternatively, we see an opportunity in selling call options with strike prices safely above the 0.6540 resistance zone. This strategy profits from the price staying down and from time decay, as long as the pair does not rally back above those key moving averages. Historically, during periods of diverging central bank policy, the US dollar has shown persistent strength that caps AUD/USD rallies.
The key will be patience, waiting for a decisive break of the 0.6484 to 0.6502 support area. Until that happens, the pair could remain caught in a range, but our bias remains to sell any strength toward the moving averages. We will continue to monitor inflation data from both countries to confirm this stance.
