AUD/USD traded near 0.7220 in Asian trading on Friday after easing from the prior day’s losses. The daily chart shows the pair rising within an ascending channel.
Price remains above the nine-day and 50-day Exponential Moving Averages, at 0.7195 and 0.7083. The 14-day Relative Strength Index is near 61, below overbought levels.
Key Resistance And Breakout Levels
Resistance sits at 0.7277, the May 6 peak and the highest level since June 2022. A break above 0.7277 could open a move towards the channel’s upper boundary near 0.7430.
Support is first seen at the nine-day EMA at 0.7195 and then the channel’s lower boundary around 0.7170. Further falls could test the 50-day EMA at 0.7083.
If the pair drops below 0.7083, it may move towards 0.6833. That level is the three-month low recorded on March 30.
The technical analysis was produced with assistance from an AI tool.
Market Outlook And Strategy Ideas
Looking back to this time in 2025, we saw the AUD/USD pair showing a clear bullish bias within an ascending channel. The price was trading around 0.7220, holding firmly above key moving averages and suggesting a move toward the 0.7277 high seen in June 2022. This technical structure set the stage for further gains that played out over the subsequent months.
Today, on May 8, 2026, that upward momentum has evolved, with the pair now testing the 0.7550 region. This strength is supported by fundamental factors, including a recent hawkish shift from the Reserve Bank of Australia and a rebound in iron ore prices, which are up 8% in the last quarter. This backdrop suggests the bullish trend we identified last year remains intact, albeit at higher levels.
For those anticipating further upside, we believe buying call options with strike prices around 0.7600 for June expiry could be a prudent strategy. This allows traders to participate in a potential rally towards the 0.7700 level. The defined risk of an options contract is attractive given the recent increase in market volatility.
Conversely, we must also consider downside risks, especially with US inflation data due next week. The key support level we identified last year around the 50-day EMA would now correspond to the 0.7420 area. Traders with existing long positions could consider purchasing protective puts below this level to hedge against an unexpectedly strong dollar.
Implied volatility has risen ahead of the upcoming economic data, indicating the market is pricing in larger price swings. The latest Australian jobs report showed unemployment holding at a historically low 3.8%, so any deviation from this trend could trigger a significant move. This environment makes strategies sensitive to volatility, such as strangles, worth considering for those who expect a breakout but are unsure of the direction.
