The Australian Dollar was set to finish Friday little changed against the US Dollar. The US Dollar Index (DXY) slipped to about 98.52, and AUD/USD traded near 0.7070.
Market focus was on US-Iran talks over the weekend, which could affect risk sentiment. AUD/USD was unable to hold above 0.7100, with Thursday’s high noted at 0.7094.
Technical Levels And Recent Price Action
AUD/USD moved above 0.6962, then struggled to break the 20-day Simple Moving Average (SMA). It later reclaimed the 20-day SMA at 0.6978 and pushed through 0.7000 before reaching weekly highs.
Resistance remains near 0.7100, with the next levels at the 11 March year-to-date high of 0.7187 and then 0.7200. Support sits at the 50-day SMA at 0.7026, followed by 0.7000, the 20-day SMA at 0.6978, and the 6 April swing low at 0.6875.
Looking back at the analysis from around this time in 2025, we can see the struggle was to overcome the 0.7100 level. Today, with the pair trading near 0.7550, that period seems like a distant floor rather than a ceiling. The fundamental drivers have clearly shifted in favor of the Aussie dollar over the past year.
The primary divergence has come from central bank policy, where we see the Reserve Bank of Australia maintaining a hawkish stance due to persistent commodity-driven inflation. Australia’s Q1 2026 CPI data recently came in at 3.8%, well above the RBA’s target, while the latest US jobs report for March 2026 showed a cooling with only 150,000 jobs added. This has cemented the interest rate differential that has been supporting the Aussie’s climb.
Options Strategies For A Continued Uptrend
For derivative traders, this sustained uptrend makes buying call options an attractive strategy to consider in the coming weeks. We believe purchasing calls with a 0.7600 strike price and a May expiration could offer leveraged exposure to a potential break of the next psychological barrier. This position allows for significant upside participation while defining the maximum risk to the premium paid.
Alternatively, for those with a moderately bullish to neutral outlook, selling cash-secured puts below the current support could be a prudent move. We would look at selling the 0.7450 strike puts, as this level aligns with technical support and the 50-day moving average. This strategy allows us to collect premium as long as AUD/USD stays above the strike price by expiration.
We should also note that implied volatility in the pair has remained relatively contained, now sitting in a 9-11% range for one-month options. This is a stark contrast to the volatility spikes we saw during the geopolitical tensions of early 2025. The current lower volatility environment makes buying options relatively cheaper, favoring strategies that benefit from a potential move higher.
