Key Points

• Gold trades near $4,550, with COMEX futures up 0.6%.
• Brent crude surges above $115, marking a 60% monthly rise.
• Gold has dropped over 15% this month, its steepest fall since October 2008.

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Gold prices edged higher on Monday, with the June COMEX contract rising 0.6% to $4,550 per ounce.

The move comes as a softer U.S. dollar improves affordability for international buyers, offering short-term support to bullion.

Gold steadied, holding its first weekly gain since the war in the Middle East began more than a month ago https://t.co/RfTvnYEIac

— Bloomberg (@business) March 29, 2026

Silver followed, climbing 1.1% to $70.520 per ounce, reflecting broader precious metals demand.

However, gains remain limited as macro headwinds continue to weigh on sentiment.

Gold may stabilise in the near term, but upside could remain capped without a sustained dollar decline.

Oil Shock Drives Inflation Concerns

Energy markets remain the dominant macro driver.

Brent crude surged past $115 per barrel, recording a 60% rise in March, driven by escalating tensions in the Middle East.

Recent attacks by Yemeni Houthis on Israel have intensified fears of prolonged disruption, reinforcing inflation risks.

Oil surges 3% as Iran war escalates with Yemen’s Houthis entering the Mideast conflict https://t.co/33qzIH2lWs

— CNBC (@CNBC) March 30, 2026

Higher energy prices feed directly into broader inflation expectations, complicating the outlook for central banks.

Fed Rate Expectations Shift Sharply

Markets have significantly adjusted expectations for U.S. monetary policy.

Traders now see minimal likelihood of a rate cut this year, a stark reversal from earlier expectations of two cuts before the conflict escalated.

Rising inflation pressures from energy costs are expected to keep interest rates elevated.

US consumer sentiment slides to three-month low as war fans inflation fears https://t.co/PXoQWYJveB https://t.co/PXoQWYJveB

— Reuters (@Reuters) March 28, 2026

This dynamic poses a challenge for gold, as higher rates increase the opportunity cost of holding non-yielding assets.

Persistent inflation may keep gold under pressure despite its safe-haven appeal.

Gold Faces Pressure Despite Safe-Haven Demand

Gold typically benefits during periods of geopolitical uncertainty, yet current price action tells a more complex story.

Despite ongoing conflict, gold has fallen more than 15% this month, marking its steepest decline since October 2008.

This drop has been driven largely by a stronger dollar, which has gained over 2% since February 28, when the U.S.-Israeli war on Iran began.

The interplay between safe-haven demand and rising yields continues to create conflicting signals for gold prices.

Technical Analysis

Gold is trading around 4536, attempting a bounce after a sharp corrective move that followed the rejection from the 5598 high. The structure has clearly shifted from a strong uptrend into a medium-term pullback, with price now testing whether a base can form.

Trend Structure and Momentum

The moving averages show a clear deterioration in trend:

• MA5: 4479
• MA10: 4577
• MA20: 4843
• MA30: 4938

Price is currently:

• Slightly above MA5, but
• Still below MA10, MA20, and MA30

This tells you the bounce is early-stage and fragile, not yet a confirmed reversal.

The earlier sell-off was aggressive, with long bearish candles and strong follow-through. The current rebound is much smaller, suggesting short-covering rather than strong fresh buying.

Key Levels To Watch

• Immediate Resistance: 4575 → 4650
• Stronger Resistance: 4760 → 4850
• Support: 4400 → 4275
• Breakdown Level: Below 4275 opens deeper correction toward 4100

The 4575 (MA10) area is the first key test. If price fails there, sellers remain firmly in control.

Price Behaviour Insight

The move from ~3900 to 5598 was a strong macro-driven rally. What we are seeing now is:

• A distribution phase near the highs
• Followed by a sharp unwind
• Now transitioning into a potential consolidation or corrective range

The recent bounce off the lows shows some demand, but:

• No strong impulsive candles yet
• Resistance is still pressing down
• Structure still shows lower highs

What to Watch Next

Focus on how price behaves around 4575–4650:

• Rejection: Likely continuation lower toward 4400
• Break and hold above 4650: Opens a move toward 4760

Also watch macro drivers closely:

• US dollar direction (USDX)
• Treasury yields
• Ongoing geopolitical risk, especially energy-driven inflation narratives

Gold tends to react quickly to shifts in rate expectations, so any change in that narrative will drive the next move.

Cautious Outlook

The bias remains corrective to bearish below 4650, with rallies still vulnerable to selling pressure. A sustained move above 4760–4850 is needed to stabilise the structure. Until then, price risks another leg lower or extended consolidation around current levels.

What Traders Should Watch Next

Gold remains highly sensitive to macro and geopolitical developments. Key drivers include:

• Direction of the U.S. dollar
• Oil price movements and inflation expectations
• Federal Reserve policy signals
• Developments in Middle East tensions

For now, gold is caught between competing forces, with inflation risks and rate expectations shaping its near-term path.

Learn more about trading Precious Metals on VT Markets here.

Trader Questions

Why is Gold Rising Slightly Despite Bearish Pressure?

Gold is supported by a softer dollar, which makes it cheaper for global buyers, even as broader pressures remain.

Why Has Gold Fallen Over 15% This Month?

Gold has dropped more than 15%, its steepest fall since October 2008, due to a stronger dollar and rising interest rate expectations.

How Do Rising Oil Prices Affect Gold?

Higher oil prices increase inflation risks, which can support gold, but also reduce the chances of rate cuts, which weighs on it.

Why Are Fed Rate Expectations Important for Gold?

Higher interest rates increase the opportunity cost of holding gold, reducing its appeal as a non-yielding asset.

What Are Markets Expecting From the Fed Now?

Traders now see a minimal likelihood of a rate cut this year, compared to expectations of two cuts before the conflict.

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Asian markets gave little guidance after the sell-off on Thursday and Friday, with attention shifting to Europe and the UK for the next move. The Yemen–Israel strike was mentioned as a possible factor that may already have been reflected in prices. The US dollar was described as firm, while the New Zealand dollar remained weak. A short-term corrective rebound was expected, without major breaks above resistance.

Markets Await Next Catalyst

Wide trading ranges in the S&P 500, Dow and Nasdaq put focus on Pivot Points during the session. For the Nasdaq, the long-term 38.2% Fibonacci level was cited as still holding, supporting the broader uptrend. A 5-month double top was noted, with a measured move target of 21,399, which sits below the 38.2% Fibonacci level at 22,494. The emphasis was that only daily closes, not intraday breaks, should be treated as confirmation. Price action was expected to stay subdued and corrective until the US market opens. Weekly and monthly charts were described as leaning lower, and the week ahead was framed as potentially volatile. We are still digesting the fallout from last week’s drone strike on Israel’s Eilat port, which has pushed Brent crude back above $95 a barrel for the first time since late 2025. This escalation is reigniting inflation fears that we thought were fading. The VIX, the market’s fear gauge, jumped over 25% last week to close at 18.5, its highest level this year. This geopolitical shock, combined with February’s hotter-than-expected 3.5% CPI print, has put the Federal Reserve in a tough spot. Consequently, we’ve seen fed funds futures price out a May rate cut, with probabilities collapsing from over 70% earlier this month to just 25% today. This explains why the Dollar Index (DXY) is bid, holding firmly above the 105 level.

Technical Levels And Risk Focus

For Nasdaq traders, the structure looks increasingly heavy after forming a five-month double top near the 24,500 level back in October 2025 and again this February. We should watch for a weekly *close* below the long-term Fibonacci support at 22,494 to confirm a deeper correction towards 21,399. Buying puts or establishing bear put spreads could be a prudent way to hedge or speculate on this potential move. The wide trading ranges in the S&P 500 and Dow suggest volatility will remain high, making pivot points critical for intraday trades. Meanwhile, the Kiwi dollar remains weak, trading below 0.5800 against the USD, after New Zealand’s GDP data from last quarter confirmed a technical recession. In this environment, we must be selective, focusing on clear technical structures rather than chasing broad market moves. Create your live VT Markets account and start trading now.

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USD/JPY pulled back from the mid-160.00s on Monday in Asia, after reaching its highest level since July 2024. It broke a four-day winning run and fell to about 159.70–159.65, with losses viewed as limited for now. Remarks from BoJ Governor Kazuo Ueda and Vice Finance Minister Atsushi Mimura raised expectations of action to curb Yen weakness. This led to short-covering in JPY and pushed USD/JPY lower, while Middle East conflict risks may limit further Yen gains.

Technical Picture And Momentum

Technically, the pair remains above the rising 100-period EMA on the 4-hour chart and stays supported by an uptrend line from around 157.20. RSI is near 54, suggesting neutral-to-positive momentum and a steadier rise rather than a sharp move. MACD remains slightly above its signal line in positive territory, but the histogram is contracting, pointing to slower upside momentum. Support is seen near 159.40, then 159.00, and the 100-period EMA around 158.70. Resistance levels are 160.20 and 160.30, with a break above 160.30 targeting 160.80. A sustained fall below 158.70 would weaken the upside case and suggest a broader correction. We are seeing the USD/JPY pair retreat from the 160.50 area after Japanese officials signaled they might step in to support their currency. This verbal warning is causing traders to buy back the yen, but the potential for this dip is likely limited. The underlying trend still appears to favor a stronger dollar against the yen. We must take this intervention threat seriously, as it reminds us of the direct market action we analyzed back in 2025 when looking at the 2022 charts. Recent Japanese trade data for February 2026 showed a significant 12% year-on-year rise in import costs, providing a strong domestic incentive to prevent further yen weakness. The key question is whether officials will act before the pair establishes itself firmly above the 160.50 level.

Strategy And Key Levels Ahead

The dollar’s strength remains supported by monetary policy differences, especially after the latest US CPI figures released last week came in at a stubborn 3.1%, higher than expected. This reinforces the view that the Federal Reserve will be in no hurry to cut interest rates. This wide interest rate gap between the US and Japan continues to be the primary driver for a higher USD/JPY. Given the uncertainty, using options to define risk seems prudent for the coming weeks. Traders who believe the uptrend will resume could consider buying call options with strikes near 160.50 to target a move toward 160.80. This approach protects capital from a sudden drop caused by any surprise intervention from authorities. On the other hand, the technical support around 158.70 is a critical line to watch. A sustained break below this level would negate the immediate bullish bias. Traders could use this as a trigger to purchase put options to profit from a deeper correction towards the 157.00 handle. Create your live VT Markets account and start trading now.

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Gold prices in Malaysia were broadly unchanged on Monday, based on FXStreet data. Gold was priced at MYR 580.91 per gram, compared with MYR 581.05 on Friday. Gold was also steady at MYR 6,775.65 per tola, down from MYR 6,777.21 on Friday. Other listed prices were MYR 5,809.13 for 10 grams and MYR 18,068.26 per troy ounce.

How Fxstreet Calculates Local Gold Prices

FXStreet derives Malaysia’s gold prices by converting international prices using the USD/MYR exchange rate and local measurement units. Prices are updated daily at publication time and are provided as a reference, with local rates able to vary slightly. Gold is commonly used as a store of value and medium of exchange, and it is also used in jewellery. It is often used as a hedge against inflation and currency weakness, and is linked to periods of market stress. Central banks are the largest holders of gold. They added 1,136 tonnes, worth about $70 billion, to reserves in 2022, the highest annual total since records began. Gold often moves inversely to the US Dollar and US Treasuries, and can also move against risk assets. Its price can react to geopolitics, recession concerns, interest rates, and USD movements.

Key Drivers To Watch

Gold prices are currently showing stability, which often precedes a significant move, so we must remain vigilant. This price consolidation comes after a strong performance we saw through much of 2025. The market is now closely watching for shifts in central bank policy, particularly from the US, as that will dictate the dollar’s direction. We see that expectations for future interest rate cuts are beginning to build, which is a primary catalyst for gold. With the latest US inflation data from February 2026 showing the Consumer Price Index at 2.4%, the case for the Federal Reserve to maintain high rates is weakening. A lower interest rate environment reduces the opportunity cost of holding a non-yielding asset like gold. Central bank buying continues to be a major supporting factor for the price, a trend that has been incredibly strong since 2022. Looking back, World Gold Council data showed central banks added over 1,000 tonnes in both 2023 and 2024, and reporting from 2025 indicates another robust year of net purchases above 900 tonnes. This consistent demand from official sources provides a solid price floor and signals confidence in the metal. The inverse relationship between gold and risk assets remains a key consideration for us. The CBOE Volatility Index (VIX) has been hovering in the high teens, well above the lows we saw in early 2025, indicating that market participants are still nervous. In this environment, gold’s role as a safe-haven asset makes it a critical portfolio diversifier against potential stock market downturns. For traders in the coming weeks, using derivatives to position for a potential upward break seems prudent. Buying call options with expirations in the next two to three months offers a defined-risk way to capture gains if interest rate expectations soften further and push gold higher. This strategy allows us to capitalize on the upside while limiting potential losses if the price remains range-bound. Create your live VT Markets account and start trading now.

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WTI crude edged lower after three sessions of gains, trading near $98.90 a barrel in Asian hours on Monday. Prices may rebound due to concerns about supply risks, as expectations of a rapid end to the Iran conflict weaken. Iran-backed Houthi forces in Yemen carried out their first strikes on Israel over the weekend, widening the conflict. The group said attacks will continue until operations against Iran and its allies stop, and it also threatens Red Sea shipping and Saudi energy sites.

Escalation And Supply Risk

The US is reported to be preparing for a prolonged ground campaign in Iran, with thousands of troops being deployed to the region. President Donald Trump has also raised the idea of taking control of Iran’s oil resources, including the Kharg Island export terminal. Trump also indicated a shift on Cuba, saying he does not oppose countries supplying crude oil to the island. This comes as a sanctioned Russian tanker nears Cuba with a shipment described as critical, offering some relief amid an effective US-led oil blockade. The vessel, linked to Russia’s “shadow fleet”, has been tracked off Cuba’s eastern coast and is expected to dock soon, according to Reuters. The delivery is set to ease pressure on Cuba’s strained energy supplies. The brief dip in WTI to around $98.90 should be seen as a temporary pause, not a change in trend. We are now bracing for a significant spike in market volatility, likely pushing the CBOE Crude Oil Volatility Index (OVX) to levels not seen since the market panic of early 2022. This means option premiums are about to get much more expensive, making it costly to wait on the sidelines.

Positioning And Volatility

The potential for a prolonged US ground campaign in Iran directly threatens nearly 3.2 million barrels of daily crude production from the market. Any disruption to the Kharg Island terminal, which handles the vast majority of Iran’s exports, would represent a severe and immediate supply shock. We remember how prices surged past $120 a barrel after the conflict in Ukraine began, and this situation has the potential for a similar, if not greater, impact. Furthermore, the expansion of Houthi strikes introduces a broader risk to shipping that we have become all too familiar with since last year. These attacks on the Red Sea chokepoint, through which about 10% of global seaborne oil travels, will inflate insurance premiums and freight costs. This adds a geopolitical risk premium to every barrel, regardless of its origin. Given this outlook, traders should be actively buying out-of-the-money call options or establishing bull call spreads to capitalize on upward momentum while defining risk. We believe positioning for a move toward the $115-$125 per barrel range is now a prudent strategy. Waiting for further confirmation will likely mean paying significantly more for the same positions. It is critical to remember that any government response will be limited. After the historic drawdowns of 2022 and only partial replenishment efforts through 2025, the US Strategic Petroleum Reserve still sits near a 40-year low of around 365 million barrels. This leaves very little buffer to absorb a supply shock of this magnitude, leaving the market dangerously exposed. The policy shift on Cuba and the arrival of a sanctioned Russian tanker is a minor development. The volume involved is insignificant when compared to the millions of barrels per day at risk in the Persian Gulf. We should treat this news as market noise that does not alter the overwhelmingly bullish primary thesis for crude oil in the coming weeks. Create your live VT Markets account and start trading now.

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GBP/USD edged up to about 1.3270 in Asian trade on Monday after four sessions of losses, but it stayed inside a descending channel. The daily chart kept a bearish tone as the pair remained below the nine-day and 50-day EMAs. The 14-day RSI was near 41, below the 50 mark, which points to ongoing downside momentum. Recent lower closes also showed continued selling on rebounds.

Market Backdrop And Risk Sentiment

In early-week trade, GBP was around 1.3240 against USD, the lowest level in almost two weeks. Reports of possible US ground action in Iran reduced demand for risk assets and supported the dollar. S&P 500 futures were down 0.5% at the time referenced. The US Dollar Index rose for a fifth straight session to near 100.35. The recent BoE decision to hold rates kept GBP supported compared with earlier levels. Even so, uncertainty around US-Iran talks left the pair’s near-term outlook mildly bearish. Looking back at the analysis from 2025, we can see the bearish technical setup for GBP/USD around 1.3270 was a clear signal. Those concerns about a strong dollar amid geopolitical risk in the Middle East largely played out over the subsequent year. Now, with the pair trading near 1.2550, the long-term descending channel has proven to be a dominant factor.

Policy Divergence And The Rate Gap

The fundamental picture has since shifted from geopolitics to central bank policy divergence. While we saw the Bank of England attempt a “hawkish hold” back in 2025, the US Federal Reserve has maintained a more aggressive stance. As of March 2026, the Fed’s key interest rate at 5.0% remains significantly higher than the BoE’s 4.5%, a differential that continues to attract capital to the dollar and pressure the pound. This interest rate gap is justified by recent inflation data, with UK CPI falling to 2.8% while US core PCE remains stickier at 3.1%, giving the Fed less room to consider easing policy. The US Dollar Index (DXY) reflects this reality, currently holding strong around 104.50, far above the 100.35 level seen during the 2025 risk-off period. This sustained dollar strength continues to act as a major headwind for any significant GBP/USD recovery. For traders, this environment suggests that selling into strength remains a viable strategy. The bearish momentum we saw in 2025, confirmed by the RSI below 50, is still technically in play, with the pair consistently failing to hold above the 50-day EMA. Volatility options could be attractive, and traders might consider buying put options to capitalize on potential further declines, particularly if the pair breaks below the key psychological support at 1.2500. Create your live VT Markets account and start trading now.

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GBP/USD edged up after four straight losing days, trading near 1.3270 in Asian hours on Monday. The daily chart keeps a bearish tone, with price still moving inside a descending channel. Near-term direction remains mildly bearish because the pair is below the nine-day and 50-day Exponential Moving Averages (EMAs). These EMAs are at 1.3329 and 1.3424, and they continue to limit rebounds.

Near Term Momentum Signals

The 14-day Relative Strength Index (RSI) is near 41, staying under the 50 level. Recent lower closes also point to continued selling on upticks. Support may appear at the three-month low of 1.3218, set on March 13. Another support level sits near the channel’s lower boundary around 1.3160. Resistance is first seen at the nine-day EMA at 1.3329, then the 50-day EMA at 1.3424. The upper channel boundary is near 1.3460, and a move above it could shift the bias higher towards 1.3869, the post-September 2021 high reached on January 27. The technical analysis was produced with help from an AI tool.

Risk Management Considerations

Given the persistent bearish signals for GBP/USD, we should consider strategies that profit from a continued decline. The pair’s position below key moving averages and within a descending channel suggests that selling futures contracts or buying put options are viable approaches. Key downside targets to watch are the immediate support at 1.3218 and the channel’s lower boundary near 1.3160. This technical weakness is reinforced by fundamental pressures we saw in a similar environment last year. Looking back at March 2025, UK inflation had just surged to a 30-year high of 7.0%, yet the Bank of England’s rate hike was viewed as cautious amid growing recession fears. This created a significant headwind for the pound, as the market worried about the UK’s economic outlook. Simultaneously, the U.S. Federal Reserve was taking a much more aggressive stance back then, signaling a series of sharp interest rate hikes to combat its own inflation. This policy divergence strongly favored the US dollar, adding substantial downward pressure on the GBP/USD pair. The current market dynamics are echoing that period, making bearish positions on the pound seem particularly well-supported. For those considering a contrarian position or for hedging purposes, buying call options with strike prices above the 1.3460 resistance level could be prudent. A decisive break above this channel boundary would invalidate the current bearish setup and signal a significant trend reversal. The low implied volatility often seen in range-bound markets could make such options relatively inexpensive. We must remember the price action from 2025, when a sustained break below the 1.3160 support level preceded a much larger downward move over the following months. This historical precedent suggests that if the current support levels fail, the potential for a rapid and extended decline is significant. Therefore, we should manage our risk carefully but be prepared for increased downside volatility. Create your live VT Markets account and start trading now.

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EUR/JPY slipped after small gains, trading near 184.00 in Asian hours on Monday. The move followed a firmer Japanese Yen after comments from Bank of Japan Governor Kazuo Ueda. Ueda said foreign exchange swings have a “huge impact on Japan’s economy and prices” and that the BoJ “will closely monitor FX moves”. The remarks were taken as a warning that authorities may act against one-way moves in the yen.

BoJ Signals And Policy Expectations

A “Summary of Opinions” from the BoJ’s March meeting said several policymakers still expect more tightening soon. One member backed further rate rises if growth and price forecasts are met, while another said the timing will depend on the Middle East and on wages, inflation, and financial conditions. In Europe, ECB Governing Council member François Villeroy de Galhau said policymakers could respond if energy-led inflation spreads. He said an Iran war-related energy shock may raise inflation in the near term, while the ECB cannot stop the first jump. Markets are waiting for Germany’s preliminary March inflation figures later on Monday, including HICP and CPI. The data may affect expectations for the ECB’s next policy steps. We are seeing a familiar pattern in EUR/JPY, which now trades near 188.50. Looking back to this time in 2025, the Bank of Japan was growing concerned as the pair hovered around 184.00. The verbal warnings from Governor Ueda last year did little to halt the Yen’s slide over the long term.

Volatility And Positioning Implications

The key difference now is the domestic pressure from inflation, which has remained stubbornly above the 2.5% target for the last several quarters. This makes threats of currency intervention more credible than they were in 2025. We recall the Ministry of Finance spent over ¥9 trillion intervening back in late 2022, showing their willingness to act decisively when certain lines are crossed. This tension between a hawkish BoJ and a persistently weak Yen is increasing implied volatility in the options market. Traders should consider strategies that benefit from a sharp, sudden move rather than a slow grind. The risk of a rapid decline of 3-4 figures in EUR/JPY is significantly higher now than it was a year ago. On the other side of the cross, the European Central Bank has limited room to maneuver. While last year’s energy shock from the Iran conflict has faded, recent German inflation data for March 2026 came in hotter than expected at 2.7%. This makes it difficult for the ECB to consider cutting rates, providing underlying support for the Euro. Given that EUR/JPY is trading at multi-decade highs, buying out-of-the-money put options on the pair offers a low-cost, defined-risk way to position for a correction. For example, weekly or monthly puts with a strike price around 185.00 could provide significant upside if the BoJ finally acts. The cost of these options is a small price to pay for protection against a sharp reversal. We must now watch the upcoming Japanese Tankan survey for business sentiment and the Eurozone flash CPI estimate. These data points will be the next major catalysts for the currency pair. Any sign of weakening economic conditions could alter the outlook for either central bank. Create your live VT Markets account and start trading now.

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AUD/USD fell 0.3% to near 0.6850 in early Asian trade, after breaking below the 0.6900 support level linked to the February 6 low. The move came as risk-off conditions weighed on the Australian Dollar. S&P 500 futures dropped 0.4% in the Asian session. Reports said the US is considering 10,000 additional troops for possible ground action against Iran, alongside warnings from Tehran.

Risk Off Pressure

In Australia, Prime Minister Anthony Albanese said fuel excise on petrol and diesel will be cut to 50% for three months. The measure aims to ease household costs as energy prices rise amid Middle East supply disruption. The US Dollar was little changed, with the DXY holding above 100.00. Market pricing shifted away from two 2026 rate cuts, and put the chance of at least one Fed hike this year at 24.6%, based on CME FedWatch. Technically, AUD/USD is below the 20-day EMA near 0.6995, with resistance at 0.6920 and 0.6995. Support sits around 0.6750, then 0.6660, while the 14-day RSI moved into the 20.00–40.00 range. Looking back at the analysis from 2025, we can see that the bearish breakdown below 0.6900 was a significant turning point. That risk-off mood has persisted, and the fundamental reasons for Aussie weakness have only deepened over the past year. Today, with the pair struggling to hold above 0.6600, that old analysis remains highly relevant.

Central Bank Policy Divergence

The key difference now is the clear policy divergence between the central banks, which wasn’t as pronounced last year. The Reserve Bank of Australia is now hinting at rate cuts after the latest quarterly inflation data came in at 2.8%, just inside their target band. This contrasts sharply with the firm stance from the US Federal Reserve. In the United States, recent Non-Farm Payrolls data showed a robust addition of over 250,000 jobs, and core inflation remains sticky above 3.1%. This strength gives the Fed no reason to ease policy, keeping the US dollar supported on interest rate differentials alone. The market has now fully priced out any Fed cuts for the first half of 2026. Furthermore, the risk sentiment that hurt the Aussie last year has shifted from Middle East conflict fears to concerns over slowing growth in China. Iron ore, Australia’s key export, has fallen over 15% in this first quarter of 2026, trading near $105 a tonne. This directly weighs on the Australian dollar’s value. For derivative traders, this environment favors strategies that profit from a further decline or sideways consolidation at these lower levels. Buying put options with strike prices around 0.6500 or 0.6450 offers a clear directional bet on the continuation of this trend. Alternatively, selling out-of-the-money call options or establishing bear call spreads can generate income by betting the pair will not rally significantly above current resistance. Given the steady downtrend, implied volatility in AUD/USD options may be relatively low compared to historical peaks. This can make purchasing puts more affordable, providing a cost-effective way to position for another leg down toward the multi-year lows seen in late 2023. We should monitor central bank statements closely, as any unexpected shift could quickly alter this outlook. Create your live VT Markets account and start trading now.

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