AUD/USD slipped to 0.6900 on Wednesday and later hovered around 0.6903 as markets weighed mixed US releases. The ISM Manufacturing PMI eased to 53.3 in June from 54.0 in May, below forecasts for no change, yet stayed above the 50.0 expansion line for a sixth month. New Orders edged down to 56.0 from 56.8, while the Prices Paid Index fell to 73.0 from 82.1. The dollar’s early support faded after ADP showed private payrolls rising 98,000 in June versus 118,000 expected and 122,000 previously, focusing attention on the upcoming NFP report and the Fed outlook.
In Australia, the next event risk is Thursday’s Trade Balance after April posted a goods surplus of A$1.8 billion, returning to surplus following March’s deficit, with imports up 0.8% MoM alongside a rebound in iron ore and coal exports. On the 4-hour chart, AUD/USD trades above the 20-period SMA at 0.6895 but remains below the 100-period SMA at 0.6980, with RSI near 49. Resistance levels sit at 0.6916 and 0.6930, while support is at 0.6895 and 0.6882.
Volatility and Trading Strategies Amid Uncertainty
With the US giving mixed signals, we see the AUD/USD pair stuck in a tight range around 0.6903. The softer ADP private payrolls number at 98,000 has created significant uncertainty ahead of the official US Nonfarm Payrolls report. Analysts are now forecasting a subdued NFP print of around 110,000, which if missed, could pressure the US Dollar.
Given this uncertainty, we believe traders should consider strategies that profit from a potential spike in volatility. Implied volatility for AUD/USD weekly options has already climbed to a four-week high of 9.8% in anticipation of the upcoming data. A long straddle, buying both a call and a put option with a strike price near 0.6900, could be an effective way to capture a sharp move in either direction.
Conversely, if the upcoming data does not create a major surprise, the pair could remain contained within its current technical boundaries. We see significant resistance at the 100-period moving average near 0.6980 and support around 0.6882. Selling an iron condor with strikes outside of this range could allow traders to collect premium from the expected lack of movement.
Outlook for Data Releases and Policy Risks
We are also closely watching Australia’s trade balance data, with the market consensus pointing to a surplus of A$2.1 billion. However, recent data from July 1, 2026, shows iron ore futures prices have softened to around $115 per tonne. A disappointing trade figure could undermine the Aussie and provide a clear downward catalyst for the pair.
The Fed’s policy path remains the dominant factor, with interest rate futures still pricing in a 65% chance of another rate hike by September. We recommend using options to define risk, as a surprisingly strong US jobs report could quickly override the recent softness. A break below the 0.6882 support level could trigger a move toward the 0.6800 psychological level.
