AUD/USD traded near 0.6910 during Asian hours on Monday, after two days of losses. The daily chart shows the pair remains in a descending wedge, with lower highs and lower lows narrowing, which can point to easing selling pressure and a potential upside break.
The 14-day RSI is near 43, which keeps the tone bearish. The pair is also below the nine-day EMA and the flatter 50-day EMA, adding to the near-term downside bias.
Support is at the 11-week low of 0.6833, set on 30 March, followed by the wedge floor near 0.6810. If price breaks below the wedge, focus may shift towards the 0.6400 rebound support zone.
Resistance sits at the nine-day EMA of 0.6918, then the 50-day EMA at 0.6958 near the wedge top. A sustained break above this area may open a move towards 0.7187, the highest level since June 2022, reached on 11 March.
We recall watching this exact setup back in March 2025, where the AUD/USD was coiling within a descending wedge around the 0.6900 level. The conflicting signals from the RSI and the moving averages at that time created significant uncertainty for the pair’s direction.
That pattern ultimately resolved to the downside later in 2025, with the pair breaking below the 0.6810 wedge support and eventually finding a floor near the 0.6450 level in the fourth quarter. The bearish momentum we saw a year ago played out as concerns over global growth weighed on the Aussie dollar. We have since seen a slow grind higher, bringing us to today’s price of around 0.6750.
Looking at today, April 6, 2026, the key driver is now central bank policy divergence. The latest Australian CPI data for March 2026 came in at a stubborn 3.1%, keeping the Reserve Bank of Australia hesitant to signal any rate cuts. Meanwhile, U.S. inflation has cooled to 2.8%, prompting Federal Reserve officials to guide the market towards a possible rate cut in the third quarter.
This divergence in policy suggests potential strength for the AUD relative to the USD in the coming months. Therefore, buying out-of-the-money call options could be a prudent strategy to capture this expected upside with limited risk. For example, traders could look at June 2026 calls with a strike price of 0.6850.
Conversely, downside risks from slowing Chinese industrial demand, which has kept iron ore prices from rallying, cannot be ignored. To hedge against a sudden drop, purchasing put options with a 0.6600 strike for May 2026 would offer protection. This strategy becomes more attractive if the pair fails to break above the recent resistance at 0.6780 this week.
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