Rba Outlook Shifts
In Australia, comments from RBA Deputy Governor Andrew Hauser led markets to bring forward expectations for a second rate rise as early as next week. This supported the Australian Dollar and limited further AUD/USD losses. On the 4-hour chart, the pair held below the 200-period EMA and later moved above the 0.7130 level. RSI is near 55, and MACD remains slightly positive, though momentum has eased. Support is around 0.7120, then 0.7080 and 0.7040, near prior lows and the 200-period EMA. A break below 0.7040 would point to 0.7000, while resistance is at 0.7150, then 0.7175 and 0.7220. We recall that period in early 2025 when the pair was pulling back from a multi-year top near 0.7185, with many seeing the dip as a buying opportunity. That bullish sentiment was supported by a hawkish Reserve Bank of Australia which seemed ready to hike rates further. As of today, March 12, 2026, with the AUD/USD trading around 0.6650, the market dynamic has clearly shifted.Drivers Behind The New Regime
The aggressive RBA stance we noted back then has reversed, as Australian inflation has cooled to 3.2%, prompting the central bank to cut the cash rate to 3.10%. While the US Federal Reserve has also started its own easing cycle, the interest rate differential still provides underlying support for the US dollar. This fundamental change is a primary reason the pair failed to hold onto gains above the 0.7000 level throughout last year. The risk aversion that was pushing the US dollar higher has eased, but headwinds for the Aussie dollar have emerged from other areas. We have seen key commodity prices soften, with iron ore, a crucial Australian export, falling from over $130 a tonne in late 2024 to around $110 a tonne currently. This puts direct pressure on the Australian dollar’s valuation. For derivative traders, this environment suggests that selling call options with strike prices well above current levels, perhaps around the old support of 0.7000, could be a viable strategy. The odds of a sharp rally back to those early 2025 highs seem low given the current central bank policies. Alternatively, traders expecting continued softness could consider buying put options with a strike below the 0.6600 support level. The technical picture has soured significantly since we saw resilience above the 0.7100 mark. The previous support level around 0.7080 now represents a major long-term resistance area. Our focus in the coming weeks will be on whether the pair can defend the 0.6600 handle, as a sustained break below it could open the door to testing the lows from last year. Create your live VT Markets account and start trading now.
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