The AUD/USD shows a downward trend, with prices below the 100- and 200-bar moving averages, found between 0.6528 and 0.6539 on the 4-hour chart. This resistance zone allows sellers to stay in control as long as the price stays below it. The current channel structure is holding steady, and recent price movements fit this pattern. On the downside, buying interest exists in the 0.6484 to 0.6502 range, which has provided support for the pair several times recently, even after a brief drop below this level.

Potential Downside Movement

If the price breaks below 0.6484, it may weaken the technical outlook, potentially heading toward key support at the channel trendline of 0.6462, and then to 0.6407. For a more positive outlook, the price needs to get above the moving averages at 0.6528 and 0.6539. Until that occurs, sellers have the advantage in the larger trading range. We are closely monitoring the AUD/USD, as sellers are firmly in control below the 0.6539 mark. The price is struggling to climb back above the crucial moving averages, indicating a likely downward trend in the near term. This keeps our outlook cautious to bearish. This perspective aligns with recent data showing that the US jobs market is unexpectedly strong, with the latest Non-Farm Payroll figures exceeding expectations. Meanwhile, iron ore prices, a key Australian export, have decreased to about $105 per tonne, down from previous highs. This mix of a strong US dollar and weakening commodity fundamentals strengthens the bearish outlook.

Derivative Trading Strategies

For derivative traders, this suggests considering put options in the upcoming weeks, particularly during any minor rallies. A solid break below the support level at 0.6484 would be a significant signal for us. We would then focus on strike prices near the next support levels of 0.6462 and even 0.6407. Alternatively, there’s also an opportunity to sell call options with strike prices well above the 0.6540 resistance zone. This strategy earns profits from the price staying low and from time decay, as long as the pair doesn’t rise above those key moving averages. Historically, in times of differing central bank policies, the US dollar has shown consistent strength that limits AUD/USD rallies. The key is to be patient and wait for a clear break of the 0.6484 to 0.6502 support area. Until then, the pair may stay within a range, but our preference is to sell any strength toward the moving averages. We will keep an eye on inflation data from both countries to confirm our position. Create your live VT Markets account and start trading now.

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