AUD/USD has paused after climbing to 0.7099 and then slipping to around 0.7072. It is still above the 50 EMA at 0.6797 and the 200 EMA at 0.6611. The current uptrend began near 0.6421.
The pair has surged from about 0.6500 and moved above 0.7000 for the first time since February 2023. The growing gap from the 50 EMA suggests the move may be overextended. This comes as the RBA raised rates by 25 basis points to 3.85%, while the Fed has signaled a more dovish path.
Technical Levels And Momentum
The Stochastic Oscillator (14, 5, 5) is near overbought, which suggests momentum may slow. Resistance is at 0.7099, followed by the 2023 high near 0.7157. Support is at 0.7000, then around 0.6950 and 0.6896.
Attention had turned to US January Non-Farm Payrolls on Wednesday, delayed from February 6 to February 11 due to a partial government shutdown. Forecasts called for 70K versus December’s 50K, along with an annual benchmark revision and unemployment data. Fed speakers Schmid, Bowman, and Hammack were also scheduled.
The AUD is driven by RBA policy and its 2–3% inflation target, demand from China, and iron ore exports worth about $118 billion a year (2021). The trade balance and broader risk sentiment also influence the currency.
The rally has now paused more clearly, as today’s US Non-Farm Payrolls report was far stronger than expected. Markets looked for a 70K gain, but the figure came in at 353K. That triggered a sharp reversal from the 0.7100 area and has led traders to question the Fed’s dovish outlook.
Options Positioning After The Data
We view this pullback as a healthy correction after the steep, uninterrupted climb from the 0.6500 area seen in late 2025. The overbought stochastic oscillator was an early warning, and the strong US jobs report provided the trigger. The pair is now testing the key 0.7000 level as near-term support.
For derivatives traders, this shift may favor buying put options to hedge long positions or to position for a deeper move toward 0.6950 support. If strong US data delays Fed rate cuts, the policy gap with the RBA may narrow. That divergence has supported this rally, so a shift could weigh on AUD/USD in the weeks ahead.
On the other hand, the dip may appeal to traders still bullish on the longer-term trend. Buying call options with strikes near current levels can be a lower-cost way to position for a rebound. The RBA cash rate is still firm at 4.35%, which supported the currency through the last quarter of 2025.
China also remains a key factor. Recent PMI data has not shown steady expansion. While iron ore prices have stayed supportive and have recently traded above $120 per tonne, weaker Chinese industrial activity could limit further strength in the Aussie dollar. With mixed fundamental signals, volatility risks remain elevated.
Now that the event has passed, implied volatility—often elevated ahead of NFP—will likely ease. This can make strategies such as selling covered calls against existing long positions more attractive for income. It also fits a scenario where the pair consolidates as markets digest today’s surprise jobs report.
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