Technical Picture On The Four Hour Chart
On the 4-hour chart, AUD/USD slipped below the gently rising 200-period EMA, after last week’s move stalled above 0.7100. The MACD moved below its signal line and under zero, with a modestly negative histogram. The RSI is near 37, below the 50 midline and not in oversold territory. Traders are watching 0.6960–0.6950 as the next support for a further move lower. Resistance is seen around 0.7030, where the 200-period EMA meets the breakdown area. A move above it could lift the pair towards 0.7085 and the recent high at 0.7115. We are seeing a familiar bearish setup in AUD/USD, which mirrors the technical breakdown we observed in early 2025 around the 0.7000 level. The pair is currently trading near 0.6550, and the underlying negative momentum appears to be building once again. The fundamental reasons for this weakness have become even clearer over the past year. The US Dollar remains underpinned by a Federal Reserve that is holding firm on interest rates. Recent data for February 2026 showed US core inflation is still sticky at 3.1%, well above the Fed’s target, which has pushed expectations for any rate cuts further into the future. This policy divergence is putting sustained pressure on the Australian dollar.Strategy And Key Risks Ahead
On the Australian side, support from a hawkish Reserve Bank of Australia is being eroded by economic headwinds. Iron ore prices, a critical Australian export, have declined over 15% since the start of 2026 amid concerns about weakening global industrial demand. This is happening even as Australia’s own inflation remains elevated at 3.5%, creating a difficult situation for the RBA and the currency. Given this outlook, buying AUD/USD put options with strike prices below 0.6500 could be an effective strategy to capitalize on further downside in the coming weeks. Alternatively, we see an opportunity in establishing bear call spreads by selling calls at the 0.6650 resistance level to collect premium. This strategy profits if the pair moves down, sideways, or only slightly up. The main risk to this bearish view is a significant shift in central bank rhetoric or a surprise rebound in commodity prices. A sustained break back above the 0.6620 level would signal that the immediate downward pressure is easing. We will monitor that level as a potential point to reassess our bearish positions. Create your live VT Markets account and start trading now.
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