Key Moments
- AUD/USD recovered from a bearish gap near 0.7115, trading back above the mid-0.7100s during the Asian session.
- Diverging Fed and RBA policy expectations, alongside a modest USD pullback, supported the pair despite US-Iran tensions around the Strait of Hormuz.
Spot Market Overview
The AUD/USD pair drew fresh buying interest after opening the week with a downside gap around the 0.7115 area on Monday, lifting the exchange rate back above the mid-0.7100s during the Asian session. This rebound followed a modest retreat from Friday’s high near 0.7220, which marked the strongest level since June 2022.
At the start of the week, the US Dollar began on firmer footing as renewed tensions between the United States and Iran over the Strait of Hormuz weighed initially on AUD/USD. That early pressure faded as the USD was unable to fully extend gains, with waning expectations for an additional interest rate increase by the US Federal Reserve limiting follow-through strength in the greenback.
In contrast, the Reserve Bank of Australia’s relatively hawkish stance provided a supportive backdrop for the Australian Dollar, helping to underpin the recovery in the currency pair and offset some of the broader risk-related concerns tied to Hormuz developments.
Technical Picture and Momentum Signals
From a technical standpoint, the recent sharp advance from the vicinity of the 100-day Simple Moving Average – which also coincided with the monthly swing low – and last week’s clear break above horizontal resistance at 0.7115 were viewed as important bullish developments for AUD/USD. The return of buyers around that former barrier, now acting as support, reinforced the constructive near-term outlook and indicated that the prevailing bias for the pair remained tilted to the upside.
Momentum indicators were aligned with this view. The Moving Average Convergence Divergence (MACD) indicator remained in positive territory and above its signal line, while the Relative Strength Index (RSI) hovered around 62, signaling firm buying interest without yet pointing to overbought conditions. In this context, additional gains beyond the psychological 0.7200 level, with a potential retest of the year-to-date high in the 0.7220-0.7225 band, appeared to be a clear possibility.
Key Support Levels
On the downside, initial technical support was identified near 0.7115, a level that underpinned the broader advance and was expected to continue cushioning near-term pullbacks. A deeper corrective move below the 0.7100 figure would likely draw renewed buying interest, given the still-bullish structure above the 100-day Simple Moving Average located close to 0.6900. That support zone, combined with a positive MACD profile and a strong RSI, continued to argue against a more pronounced downside reversal at this stage.
Australian Dollar Performance Against Majors This Month
The following table shows this month’s percentage change in the Australian Dollar against a range of major currencies, as reported. The Australian Dollar showed its largest relative gain versus the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.76% | -2.04% | 0.02% | -1.58% | -3.59% | -2.27% | -2.14% | |
| EUR | 1.76% | -0.30% | 1.85% | 0.17% | -1.89% | -0.57% | -0.39% | |
| GBP | 2.04% | 0.30% | 2.12% | 0.46% | -1.58% | -0.25% | -0.11% | |
| JPY | -0.02% | -1.85% | -2.12% | -1.57% | -3.66% | -2.38% | -2.17% | |
| CAD | 1.58% | -0.17% | -0.46% | 1.57% | -2.11% | -0.81% | -0.57% | |
| AUD | 3.59% | 1.89% | 1.58% | 3.66% | 2.11% | 1.33% | 1.50% | |
| NZD | 2.27% | 0.57% | 0.25% | 2.38% | 0.81% | -1.33% | 0.16% | |
| CHF | 2.14% | 0.39% | 0.11% | 2.17% | 0.57% | -1.50% | -0.16% |
The heat map is structured so that the base currency is selected from the left-hand column and the quote currency from the top row. For example, choosing the Australian Dollar in the left column and moving horizontally to the US Dollar cell shows the percentage change for AUD (base)/USD (quote).
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