RBA minutes said the latest rate rise was needed. Future moves will depend on new data and changes in risk. The cash rate is 3.60%, and markets are pricing about a 70% chance of another rise in May.
Australia’s Q4 Wage Price Index is due on Wednesday. January jobs data follows on Thursday. Forecasts are for 20K jobs added versus 65.2K previously, participation at 66.8%, and unemployment at 4.2%. Preliminary February S&P Global PMI is also due.
Fed Data And Market Focus
The Fed releases January minutes on Wednesday after a 10–2 vote kept rates at 3.50% to 3.75%. Two members voted for an immediate cut. US jobless claims and the Philadelphia Fed survey follow on Thursday. Friday brings Q4 GDP (3.0% forecast versus 4.4% prior), core PCE (0.3% m/m forecast), and final February UoM sentiment.
AUD/USD opened at 0.70754, traded between 0.70901 and 0.70283, and closed at 0.70824, down 0.10%. It is above the 50-day EMA at 0.68497 and the 200-day EMA at 0.66344. It is below the 0.71473 high but above the 0.66636 January low.
Stochastic (14,5,5) shows %K 77.27 and %D 83.79. Key levels are support at 0.70283, then 0.7000, and resistance at 0.7100, then 0.71473 and 0.7200. The AUD is also influenced by RBA policy, Australia’s 2–3% inflation goal, China’s demand, iron ore exports worth $118 billion in 2021, and the trade balance.
The Reserve Bank of Australia is holding policy steady for now and is watching incoming data for its next move. With the cash rate at 3.10%, the market is watching whether easing inflation could allow cuts later in the year. In Q4 2025, annual inflation cooled to 3.5%, down from the highs of earlier years.
Technical And Macro Drivers
The US Federal Reserve is keeping interest rates higher. This gives the US dollar a yield advantage and puts pressure on the Australian dollar. Traders are now watching US inflation and jobs data for signs the Fed may turn less hawkish.
On the chart, AUD/USD is in a clear downtrend near 0.6550. It is well below the 50-day and 200-day moving averages. The pair is also moving sideways in a tight range, with support near the 0.6500 psychological level. Rallies have repeatedly failed near the 0.6620 resistance zone.
China’s economic outlook is another drag on the Aussie. Recent China industrial production data missed expectations, which can reduce demand for Australian exports. This has weighed on iron ore, Australia’s largest export, with prices down to about $110 per tonne.
Lower commodity prices are also pressuring Australia’s trade balance, as the surplus has narrowed in recent months. At the same time, a broader “risk-off” mood has investors leaning toward safer assets. With the US economy holding up and China looking cautious, traders have been less willing to buy risk-sensitive currencies like the AUD.
In this environment, traders may prefer strategies that suit a range or allow for further downside in AUD/USD. Buying put options can help protect against weakness. Selling call options near the 0.6620 resistance level may generate income if the pair stays capped. Australian jobs data and key US inflation data are likely to be the next major catalysts.
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