AUD/USD hit its highest level since August 2022 on Wednesday. The move followed the delayed US Non-Farm Payrolls report, which showed 130K jobs added versus a 70K forecast. The report also showed major downward revisions. March 2025 payrolls were revised 898K lower. Average monthly job gains for 2025 were revised down to 15K from 49K.

Rba Policy Shift And Inflation Focus

In Australia, the Reserve Bank of Australia raised the cash rate by 25 basis points to 3.85% on 3 February. This followed a rise in inflation in the second half of 2025. Australian Consumer Inflation Expectations for February are due on Thursday. In the US, January CPI is due on Friday. Headline year-on-year CPI is expected at 2.5% (down from 2.7%), while core month-on-month CPI is expected at 0.3%. AUD/USD traded near 0.7130 on Wednesday, up 0.77%, after reaching an intraday high of 0.7143. The pair is above the 50-day EMA at 0.6810 and the 200-day EMA at 0.6616. The December low sits at 0.6466. AUD/USD has risen more than 600 pips from around 0.6700. The stochastic (14, 5, 5) is 86.24/79.19. Resistance is at 0.7143 and 0.7200, while support is at 0.7000 and 0.6930–0.7000. After this sharp rally, the market is pricing in a clear policy split: a more hawkish RBA versus a Federal Reserve facing signs of a softer US job market. The RBA’s rate hike to 3.85% on February 3 reinforces its focus on inflation. This backdrop supports further AUD strength against the USD in the weeks ahead.

Commodity Tailwinds And Options Strategy Setup

External factors are also helping the Australian dollar. Iron ore futures have moved above $135 per tonne, a 19-month high. The jump is linked to renewed demand from China after the Lunar New Year holiday. As Australia’s key export, stronger iron ore prices can provide a meaningful boost for the currency. For traders who want to take advantage of the upside momentum, buying AUD/USD call options is a simple way to position for more gains toward the 0.7200 psychological level. This approach also limits downside risk to the premium paid. Even so, caution is needed ahead of Friday’s US CPI release. A hotter-than-expected inflation print could quickly reverse the current move. With the stochastic already in overbought territory, a bull call spread may be a safer alternative. It reduces upfront cost and sets a clear risk-reward range before a potentially volatile data release. If you expect a small pullback before another push higher, 0.7000 is now a key support area. Selling put options with a strike below this level could be a way to earn income. This trade benefits if the pair stays above the strike through expiration, based on the view that any dip will be limited. In August 2022, when AUD/USD last traded around these levels, global central banks were at a different stage of their tightening cycles. The break above 0.7100 is important because it clears a multi-year range. If today’s drivers remain in place, the pair could move back toward the 2021–2022 commodity-boom levels, when it traded above 0.7400. Create your live VT Markets account and start trading now.

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