Australia Rate Decision And Initial Market Reaction
In Australia, the Reserve Bank of Australia lifted its Official Cash Rate by 25 basis points to 4.10% at its March meeting. This was the second straight rise this year, after a 25 bps increase in February. On the daily chart, price slipped from the 0.71 area and is now below the 20-day middle Bollinger Band near 0.7070. The Bollinger Bands are flattening and narrowing, and the RSI is in the mid-40s, below the midline. Resistance is at 0.7065, then 0.7100, with 0.7150 above that. Support is at 0.6920, then 0.6880, with the 100-day EMA near 0.6860, and 0.6800 lower. We recall that back in March 2025, the AUD/USD was facing pressure below the 0.7000 level due to a mix of geopolitical risks and a hawkish Reserve Bank of Australia. The situation today, March 24, 2026, presents a different dynamic for the pair, which is currently trading much lower, around 0.6540. The strong support for the Aussie we saw from the RBA last year has since faded. The RBA’s aggressive hiking cycle of 2025, which took the cash rate to 4.10%, is now a thing of the past. The central bank has held the rate steady at 3.60% for its last three meetings, and with the latest quarterly inflation figures slowing to 3.8%, the market is no longer pricing in further hikes. This removes a key pillar of support that was present for the Australian dollar last year.Us Dollar Strength And Broader Macro Headwinds
On the other side of the pair, the US Dollar remains strong, buoyed by a Federal Reserve that has kept its policy rate in the 4.75-5.00% range. While last year’s market driver was a specific geopolitical event, today’s concern is a broader slowdown in global growth, particularly in China, Australia’s largest trading partner. This environment generally favors the safe-haven status of the US Dollar. Given this backdrop, we should consider strategies that benefit from further downside or range-bound price action. Buying put options with a strike price below 0.6500 could be a viable strategy to position for a potential break of recent lows. Looking at historical price action, the 0.6800 level, which was seen as a deeper retracement target in 2025, now acts as a significant long-term resistance level. The technical picture also supports a bearish bias, similar to what we observed last year, though at lower levels. The daily RSI is struggling to climb above the 50 midline, indicating weak upward momentum. Derivative traders should watch for increases in implied volatility ahead of the upcoming Australian CPI and US employment data, as this could present opportunities to enter positions before options become more expensive. Create your live VT Markets account and start trading now.
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