AUD/USD recovered most early losses after the RBA decision and rose to about 0.7085 following Governor Michele Bullock’s press conference. The RBA raised the Official Cash Rate by 25 basis points to 4.1%, with five of nine committee members supporting the move. The RBA said the Middle East conflict had pushed fuel prices higher and that sustained rises could add to inflation. Bullock said inflation was already high because demand was exceeding supply, and that the cash rate was not high enough to return inflation to target.

Technical Picture After The RBA

The US Dollar stayed firm after a corrective move ahead of the Federal Reserve’s policy decision due on Wednesday. AUD/USD held above the rising 20-day EMA near 0.7060, supporting a mild bullish bias. The 14-day RSI moved into the 40.00–60.00 band after dropping from 60.00–80.00, pointing to steadier momentum. Resistance sits near 0.7100 and the 0.7120–0.7150 area, with further levels at the mid-0.72s and 0.7300. Support levels include 0.6944 and about 0.6900. A break below 0.6900 could open a move towards 0.6770–0.6800. We remember that period in 2025 when the RBA hiked rates to 4.1%, and Governor Bullock’s comments made it clear that domestic inflation was the real worry, even more than global oil prices. That hawkish pivot, clarifying that demand was outstripping supply, set a tone for policy that still echoes today. It showed us the central bank was willing to look through global noise to focus on homegrown price pressures.

Strategy Ideas For The Next RBA Cycle

Fast forward to today, March 2026, and the situation is getting complicated again. After falling for most of last year, the latest quarterly CPI data surprised to the upside, ticking back up to 3.4% and putting the RBA in a difficult position. With the unemployment rate also drifting higher to 4.2% from its historic lows, the bank is now torn between fighting sticky inflation and supporting a cooling labor market. This uncertainty suggests that volatility in the AUD/USD could be undervalued heading into the next RBA meetings. Traders should consider buying options straddles to profit from a significant price swing, regardless of the direction. Such a strategy would capitalize on the market’s reaction if the RBA either surprises with another hike or signals a definitive dovish pivot due to employment worries. Based on the RBA’s hawkish stance from 2025, a directional bet favouring a stronger Aussie dollar is also plausible if you believe they will prioritize inflation again. Using futures contracts to go long AUD/USD on a break above the recent 0.6750 resistance level could be a viable strategy. We can look to the old resistance levels from 2025, like 0.7100, as long-term historical targets if a new uptrend develops. The outlook for the US dollar adds another layer to this trade. While our inflation is proving sticky, the latest US CPI print came in at a more subdued 2.8%, prompting Federal Reserve officials to talk more openly about a pause. This growing policy divergence between a potentially still-hawkish RBA and a neutral-to-dovish Fed strengthens the case for a higher AUD/USD in the coming weeks. To manage risk on a bullish Aussie view, traders could use call options instead of outright futures. Buying AUD/USD call spreads allows for a defined-risk position that profits from a rise in the currency pair. This would limit potential losses if the RBA places more weight on the rising unemployment figures and issues a surprisingly cautious statement. Create your live VT Markets account and start trading now.

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