The Australian Dollar rose against the US Dollar on Tuesday as the US Dollar weakened ahead of a deadline set by US President Donald Trump for Iran to reach a deal or reopen the Strait of Hormuz by 8:00 p.m. Eastern Time (00:00 GMT on Wednesday). AUD/USD was near 0.6955, up about 0.54% on the day.
The US Dollar Index (DXY) traded around 99.80 after failing to hold above 100. The Australian Dollar also gained support from a firmer Chinese Yuan after the People’s Bank of China set the daily reference rate at 6.8854, its strongest level in nearly three years.
Technical Levels In Focus
On the daily chart, AUD/USD rebounded after holding above the 100-day Simple Moving Average at 0.6842. The pair is testing 0.6950, a prior support level that is now acting as resistance.
A move above 0.6950 could bring 0.7000 into view, close to the 50-day SMA at 0.7024. If the pair closes below the 100-day SMA, the next area in focus is 0.6700, described as a previous breakout zone.
The RSI has moved back towards 50. MACD remains slightly below its signal line but is rising towards zero, while the histogram is narrowing.
Looking back at the analysis from 2025, we see a market that was far more optimistic on the Aussie. Today, the US dollar is significantly stronger, with the US Dollar Index holding firm around 105.50, a stark contrast to the sub-100 levels seen back then. This has been a primary driver keeping AUD/USD suppressed below the 0.6600 handle in recent weeks.
Options Strategies And Macro Catalysts
The Australian dollar is also feeling pressure from its role as a proxy for China’s economy. Unlike the strong Yuan fixing we saw in 2025, recent data has been more mixed and has failed to provide a significant tailwind. The latest Caixin Manufacturing PMI for March 2026, for example, came in at 50.9, a slight cooling which has tempered enthusiasm about the recovery’s momentum.
From a technical standpoint, the pair is now contained within a much lower range, with key support found near the 0.6510 level and stiff resistance at the 50-day SMA around 0.6640. For derivative traders, this suggests that buying puts with a strike price below 0.6500 could serve as effective portfolio insurance against a potential break lower. Selling out-of-the-money call options above 0.6700 could be a strategy to generate income, banking on that ceiling holding firm.
The Reserve Bank of Australia’s decision to hold interest rates steady at its April 2026 meeting, citing persistent services inflation, has further contributed to this range-bound action. With Australian annual inflation last reported at 3.4%, the RBA is in a holding pattern, which tends to cap significant upside for the currency. This environment suggests implied volatility may stay relatively low, making long-dated options strategies less appealing for now.
We must watch for catalysts that could break the current stalemate, particularly the next US Non-Farm Payrolls report. A stronger-than-expected jobs number could reinforce the “higher for longer” Federal Reserve narrative, potentially sending AUD/USD to test the 0.6450 support zone we saw late last year. Any unexpected weakness in US data, however, could spark a short-covering rally back toward that 50-day moving average.
