AUD/USD ended a three-day rise on Thursday, closing near-flat at about 0.7165 after failing to break 0.7200. It briefly reached around 0.7200, then reversed later in the day and stayed within its recent consolidation range.
Australian figures were mixed, with Employment Change up 17.9K in March versus a 20K forecast and February’s 49.7K. The unemployment rate stayed at 4.3%, while Consumer Inflation Expectations rose to 5.9% from 5.2%.
Market Focus Shifts
US Dollar attention remained on the Iran conflict that started after US-led strikes in late February. The Strait of Hormuz stayed closed, including a US-backed blockade intended to force its reopening, adding to inflation concerns.
On a 15-minute chart, AUD/USD was near 0.7164 below the day’s open at 0.7174, with Stochastic RSI around 89. On the daily chart, price held above the 50-day EMA at 0.6995 and the 200-day EMA at 0.6770, while Stochastic RSI was 96.
The Australian Dollar is influenced by RBA policy and its 2–3% inflation target, China’s demand, and iron ore exports worth $118bn a year (2021). Trade balance shifts can also affect AUD.
Looking back to early 2025, we saw the Australian dollar showing signs of hesitation, failing to break above the 0.7200 level. That period was marked by concerns over a US-Iran conflict and a potential global inflation shock from supply disruptions in the Strait of Hormuz. Now, on April 17, 2026, the landscape has completely shifted, with AUD/USD trading much lower around 0.6550.
Central Bank Divergence
The key driver now is the divergence in central bank policy, a stark contrast to last year’s uncertainty. We have seen Australian inflation cool to 3.6% annually, and with the unemployment rate recently ticking up to 4.1%, the Reserve Bank of Australia is signaling a more dovish stance. Meanwhile, the US Federal Reserve remains hawkish as core inflation there proves sticky above 3%, creating a powerful headwind for the Aussie through interest rate differentials.
Furthermore, the commodity tailwinds that supported the Aussie in the past have weakened considerably. Iron ore prices have pulled back to around $105 per tonne, reflecting sluggish demand from China, whose recent manufacturing PMI data dipped below 50 into contractionary territory. This confirms that the health of Australia’s largest trading partner is now a significant drag, rather than a source of support.
The geopolitical risks have also changed from the supply-side inflation fears we saw in 2025. The focus has moved away from Middle East oil disruptions and towards concerns about global growth and demand. This “risk-off” sentiment, driven by economic fundamentals instead of conflict, naturally weighs on growth-sensitive currencies like the Australian dollar.
For traders, this means the technical picture from early 2025, where dips were seen as buying opportunities, is no longer valid. The key moving averages from that time, like the 50-day EMA near 0.7000, now represent formidable levels of resistance. We should view any rallies toward these old support levels as potential opportunities to initiate bearish positions, perhaps using options strategies like buying puts to gain downside exposure with defined risk.
