Large Expiry for AUD/USD

A large expiry for AUD/USD at the 0.6500 level is scheduled for tomorrow. This could help stabilize price movements before the expirations occur. Today, we are focusing on the significant USD/JPY option expiry at 147.65. With resistance from the 100-hour moving average close to 147.77, any upward movement in price will likely face strong resistance. This technical barrier is expected to keep the price in check for now. The uncertainty surrounding potential 15% tariffs on Japan is causing concerns for the upcoming weeks. This political risk means traders should be ready for sudden price changes based on new remarks from officials. As a result, holding long-term positions is risky until we have clearer information. On the economic front, recent U.S. data supports a stronger dollar. For example, the July 2025 jobs report revealed that non-farm payrolls outperformed expectations by adding 215,000 jobs, while wage growth remained stable at 4.2% year-over-year. This strength contrasts with the political tariff risk, creating a tug-of-war in USD/JPY. The Bank of Japan did not make any surprises during its late July meeting and continued its ultra-easy monetary policy. Normally, this policy difference with the Federal Reserve, which is keeping rates steady, would suggest a much higher USD/JPY. However, the current political situation is overriding these usual economic indicators for now.

Massive AUD/USD Option Expiry

Previously, we saw similar trends during the 2018-2019 trade disputes, where negative headlines often led to sharp, short-term declines in USD/JPY as investors sought the yen for safety. Traders should be cautious, as a similar flight-to-safety could pull the pair down, even with strong U.S. data. Selling options to collect premiums on expected volatility could be an intriguing, though risky, strategy. Additionally, keep an eye on the massive AUD/USD option expiry set for tomorrow at the 0.6500 level. Such a concentration of options tends to act like a magnet, keeping the currency pair around that price. This may limit significant price movements leading up to the expiry. The stability in AUD/USD is further backed by recent fundamentals, including softer-than-expected Chinese industrial production figures released last week. Given Australia’s economic ties to China, this data has dampened enthusiasm for the Aussie dollar. We believe the 0.6500 level will likely hold as a ceiling until those options expire. Create your live VT Markets account and start trading now.

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