The AUD/USD currency pair advanced during the North American session, gaining 0.70% as the US dollar weakened following news that the US and Iran reached a deal to extend a ceasefire by 60 days, which includes the reopening of the Strait of Hormuz [1]. The pair was last seen trading at 0.7167 after rebounding from daily lows near 0.7150 [1].
From a technical perspective, AUD/USD is consolidating within a nearly 100-pip range, with the upside capped by the 20-day Simple Moving Average (SMA) at 0.7185 and the downside supported by the 50-day SMA at 0.7098 [1]. The Relative Strength Index (RSI) indicates neutral to bullish momentum, suggesting potential for further gains [1]. If the pair rises above the 20-day SMA, buyers could challenge the 0.7200 level, and a break above this would expose the May 6 daily high at 0.7277, followed by the 0.7300 level [1]. On the downside, a move below the 50-day SMA at 0.7098 could turn the outlook bearish, with further support at the cycle low of 0.7079 (May 19 low), the 100-day SMA at 0.7033, and the psychological 0.7000 level [1].
The article highlights that the Australian dollar is influenced by factors such as Reserve Bank of Australia (RBA) interest rate decisions, commodity prices (especially iron ore), the health of the Chinese economy, and overall market sentiment [1]. The current risk-on environment, supported by the geopolitical development, is seen as positive for the AUD [1].
No specific forward-looking statements or analyst opinions are provided beyond the technical outlook and the mention of key drivers for the Australian dollar [1].
CONCLUSION
The AUD/USD pair has strengthened on the back of improved risk sentiment following the US-Iran ceasefire extension and reopening of the Strait of Hormuz. Technical indicators suggest potential for further upside if key resistance levels are breached, while downside risks remain if support levels fail. Market participants will continue to monitor geopolitical developments and technical signals for further direction.