**Inflation Data Anticipation** The upward trend of the pair is supported by a 20-day EMA at 0.6426, and the RSI is looking to break above 60.00. If the pair moves past 0.6515, the next targets could be 0.6550 and 0.6600. On the other hand, falling below 0.6187 raises the risk towards levels of 0.6087 and possibly 0.6000. Key factors affecting the Australian Dollar include interest rates, iron ore prices, and China’s economic performance. The Trade Balance also impacts the currency’s strength; a positive balance tends to increase its value. After reaching a six-month high, the AUD/USD pair has dipped slightly but is still around the 0.6500 mark, up by 0.3%. This movement shows caution rather than randomness. A slight recovery in the Dollar Index to nearly 99.00, up from 98.70, has diminished some of the Australian dollar’s gains. There are other reasons for traders to approach the upcoming sessions carefully. The US administration’s decision, led by Trump, to postpone the proposed 50% tariffs on the European Union boosted investor confidence late last week. This shift encouraged interest in riskier assets, benefiting the Australian dollar. The policy change occurred shortly after Brussels requested more time for negotiations with Washington. This news calmed the bond markets and triggered movements in commodity-linked currencies like the AUD. **Upcoming Economic Data** Key economic data is expected on Wednesday and Friday—not political news, but important inflation figures from both Canberra and Washington. These data releases could significantly influence central bank decisions in both countries. The Reserve Bank of Australia is being cautious, and rising consumer prices could shift expectations toward potential rate changes later this year. In contrast, the Federal Reserve is deciding whether to hint at more rate increases or to hold off. Any surprises could have a major impact on currency and interest rate futures markets. From a technical standpoint, the pair has just emerged from a Symmetrical Triangle pattern, which often signals increased price movements and volumes ahead. While these signals alone are not enough for trades, they match the growing anticipation of upcoming data. Currently, the 20-day exponential moving average at 0.6426 provides short-term support below the market price. If resistance at 0.6515 is broken, we could see reactions near 0.6550. If that level fails, we might aim for 0.6600 based on swing projections. However, attention must also be paid to the lower levels. A significant drop below 0.6187 would invalidate the current bullish trend and shift focus down to 0.6087. If sellers gain strength, the critical level to watch would be the round figure at 0.6000. Beyond price movements, the Australian dollar is influenced by iron ore trends, as Australia is a major exporter. It is also sensitive to changes in China’s economy. With Chinese industrial output still fluctuating, it’s essential to monitor related data from Beijing. Additionally, Australia’s trade balance plays a key role—larger surpluses typically provide support for the currency by showing strong demand. For those involved in rate derivatives and volatility markets, it is important not to rely solely on seasonal patterns. Option pricing around this week’s data should consider the possibility of unexpected moves, especially given current positioning in commodities and growth metrics. Premiums tied to short-term contracts may need adjustment, especially around Wednesday’s CPI data during Sydney’s trading hours. We should be ready for any surprise inflation increase that could catch the market off guard. To prepare, making skew adjustments and recalibrating delta risk during critical data releases could be beneficial. Additionally, reducing gamma exposure ahead of known catalysts may help mitigate major market fluctuations driven by headlines. Create your live VT Markets account and start trading now.

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