Upcoming Us Data And Fed Events
In the US, ISM Services PMI for March is due at 14:00 GMT and is forecast at 55.0 versus 56.1 in February. This week also includes the FOMC minutes from March and March CPI. AUD/USD remained below the 20-day EMA near 0.6960, with RSI near 45. Resistance levels are 0.6960 and 0.7000, with 0.7060 above that, while support sits at 0.6900, then 0.6850 and 0.6800. AUD drivers include RBA policy, iron ore, China’s economy, inflation, growth, trade balance, and risk sentiment. The RBA targets 2–3% inflation, and iron ore was worth $118 billion a year in 2021. We see that temporary geopolitical news, like the US-Iran discussions back in 2025, can cause short-term currency spikes. However, the more enduring drivers for the Australian dollar remain monetary policy and key commodity prices. As we move through April 2026, the focus has firmly shifted back to these fundamentals.Policy Divergence And China Risks
The Reserve Bank of Australia is under scrutiny as the latest March quarter CPI data came in slightly below forecast at 3.4%, increasing bets on a rate cut later this year. In contrast, the US Federal Reserve is dealing with stickier core inflation, which held at 3.1% last month, pushing any rate cut expectations further out. This growing policy divergence suggests potential downward pressure on the AUD/USD pair. We are also watching headwinds from China, Australia’s largest trading partner. While Q1 2026 GDP was stable at 4.8%, it points to a more moderate growth pace, which has kept iron ore prices subdued below $100 a tonne. This is a significant change from the stronger commodity prices we saw in parts of 2025 and weighs on Australia’s terms of trade. Given this backdrop, derivative traders might consider strategies that benefit from either a slow grind lower or a spike in volatility around upcoming data releases. Buying put options on AUD/USD could be a straightforward way to position for further downside towards the 0.6400 level seen earlier this year. Alternatively, selling out-of-the-money call options could be a way to collect premium if the pair remains range-bound below key resistance around 0.6650. The key events to watch in the coming weeks will be the RBA’s next policy meeting minutes and the upcoming US Non-Farm Payrolls report. Any surprisingly dovish language from the RBA or a stronger-than-expected US jobs number could accelerate a move lower. Therefore, traders should ensure their positions can withstand potential short-term volatility around these releases. Create your live VT Markets account and start trading now.
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