AUD/USD rose for a second day, up 0.36%, as the US dollar weakened. This came as US growth slowed and inflation moved closer to 3%. The pair traded at 0.7086 and was on track for a weekly gain of more than 0.19%. The pair kept moving higher after breaking above the 20-day simple moving average at 0.7034. It then pushed past 0.7050 and moved toward 0.7100.

Momentum And Key Resistance Levels

Momentum remained positive. The RSI climbed after bottoming near 59.34. If the RSI moves above 65.00, price could test resistance and the year-to-date high at 0.7147. If AUD/USD falls below 0.7000, support is at the 6 February low of 0.6897. The next support level is the 50-day SMA at 0.6832. Around this time last year, in February 2025, AUD/USD showed a clear bullish bias as it moved above 0.7080. The rally was driven by a weaker greenback, and traders targeted the yearly high at 0.7147. That strength did not last, however. The pair failed to hold the gains and later reversed that month. The situation today, in February 2026, is very different. AUD/USD is trading near 0.6650. The US inflation story has shifted from a major risk to a more controlled issue. The latest CPI data shows core inflation at just 2.5%. This is a sharp contrast to early 2025, when inflation was a larger concern and helped weaken the dollar for a period. Last year, markets reacted to signs that US growth was slowing while inflation stayed high. Today, US GDP growth has stabilized at a moderate 1.5% annual pace, and the Federal Reserve’s policy direction is clearer. This has reduced the uncertainty seen in early 2025 and lowered overall currency volatility.

Derivative Strategies In A Range Bound Market

For derivative traders, lower implied volatility may make option-selling strategies more attractive than they were a year ago. With less chance of a major breakout, traders may look to collect premium by writing covered calls against existing long positions or selling cash-secured puts near key support levels. We believe the calmer market makes being a net seller of volatility more appealing. With conditions more stable, we see more potential in range-bound strategies than in the directional trades that were popular in early 2025. Options can help define a likely trading range. For example, structures such as short iron condors may benefit if the pair continues to move between clear support and resistance levels. We are watching a possible range between 0.6500 and 0.6800 over the coming weeks. Create your live VT Markets account and start trading now.

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