Key Upside Levels
A move above the March 3 daily high of 0.7122 would open the way to the yearly high at 0.7147. The next level above that is 0.7200. On the downside, initial support is at 0.7000. A drop below 0.7000 could lead back to 0.6944 and the 50-day simple moving average at 0.6904. With the AUD/USD pushing towards 0.7080 on broad US Dollar weakness, we should position for further gains. The latest US inflation report showing a cooldown to 2.8% supports this soft dollar view, reducing pressure on the Federal Reserve. This makes buying call options with strikes above the 0.7122 resistance an attractive strategy for the coming April expirations. The Aussie’s strength isn’t just a dollar story; the Reserve Bank of Australia’s recent hawkish tone has put rate hikes back on the table. Adding to this, iron ore prices have climbed back above $120 a tonne, a significant rise from the range-bound trading we saw in late 2025. This fundamental backdrop provides a solid foundation for upside exposure targeting the yearly high of 0.7147.Downside Risk Management
We must also manage risk if the sentiment reverses and the pair fails to hold the key 0.7000 psychological level. Buying put options with a strike price around 0.6980 could offer effective protection against a sharp downturn. A decisive break below this support would shift our focus towards the recent low of 0.6944 as the next target. Create your live VT Markets account and start trading now.
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