The AUD/USD currency pair demonstrated notable resilience on Monday, rebounding near the 0.7080 level amid a favorable shift in market sentiment, primarily driven by news regarding a preliminary peace agreement between the United States and Iran. As of the latest assessments, the Australian Dollar (AUD) appreciated by 0.46% against the US Dollar (USD), reaching its highest point in a week.
In a significant announcement, US President Donald Trump confirmed that a deal with Iran had been finalized and emphasized that the Strait of Hormuz had reopened for navigation. These statements bolstered hopes that reducing geopolitical tensions in the Middle East could lead to a more stable trading environment. Trump remarked on the importance of the decrease in oil prices alongside rising stock values, sentiments that contributed to market optimism and diminished the safe-haven appeal of the US Dollar.
Despite the positive momentum for the AUD, its potential for further gains appears constrained as traders await the Reserve Bank of Australia’s (RBA) monetary policy decision set for Tuesday. Analysts widely expect the central bank to maintain the interest rate at 4.35%.
From a technical perspective, the AUD/USD is positioned at 0.7078, indicating a slightly bullish outlook on the 4-hour chart. The pair trades above the 20-period Simple Moving Average (SMA) located at 0.7037 and recent support levels at 0.7072 and 0.7065. Currently, the pair is experiencing upward pressure as it approaches a resistance area between 0.7082 and 0.7089. The 100-period SMA at 0.7110 presents a higher resistance level that would need to be breached for a more significant upward movement.
Looking ahead, immediate resistance is identified at 0.7082, followed by a stronger obstacle at 0.7089, with the 100-period SMA set at 0.7110 looming as a critical barrier for further advances. Conversely, on the downside, immediate support is noted at 0.7072, followed by 0.7065. A more profound decline toward the 20-period SMA at 0.7037 would still allow for a generally positive outlook, provided that this moving average remains intact.
