Key Moments
- AUD/USD trades near the mid-0.7000s after rebounding from a nearly two-month low around 0.7025-0.7020, with upside momentum still limited.
- Geopolitical tensions, higher Crude Oil prices, and expectations for a potential Fed rate hike in 2026 continue to support the US Dollar.
- The pair stays below its 100-day SMA and the 50% Fibonacci retracement of the March-May advance, with momentum indicators pointing to sustained downside risk.
Australian Dollar Struggles to Extend Rebound
The AUD/USD pair sees modest buying interest after touching a nearly two-month trough in the 0.7025-0.7020 band during Asian trading on Monday, but the recovery quickly loses traction. The exchange rate is hovering around the mid-0.7000s, effectively flat on the day, and remains constrained by a firm US Dollar backdrop.
Persistent strength in the greenback continues to limit any meaningful advance in the Australian currency, leaving the pair looking fragile despite the intraday bounce.
Geopolitics, Oil, and Rate Expectations Support the US Dollar
The US Dollar is underpinned by heightened geopolitical tensions and shifting interest rate expectations. The Israel Defense Forces (IDF) reported strikes on military targets in western and central Iran, hours after Iran launched a barrage of missiles at Israel’s Ramat David air base on Sunday night. This escalation threatens a delicate ceasefire and dampens prospects for a resolution to a three-month-old Iran war.
The flare-up has driven Crude Oil prices higher, reigniting worries about inflation. When combined with Friday’s stronger-than-expected US Nonfarm Payrolls (NFP) data, these developments strengthen the argument for a possible US Federal Reserve rate hike in 2026, reinforcing demand for the US Dollar.
At the same time, waning expectations for a near-term rate increase by the Reserve Bank of Australia (RBA) limit support for the Australian Dollar, further weighing on AUD/USD.
Technical Picture: Bias Remains to the Downside
From a chart perspective, AUD/USD maintains a negative short-term tone after Friday’s decisive drop below the 100-day Simple Moving Average (SMA). The pair is also trading beneath the 50% Fibonacci retracement of the March-May advance, which aligns with a bearish outlook.
Momentum indicators confirm this weaker structure. The Relative Strength Index (RSI) sits near 38, while the Moving Average Convergence Divergence (MACD) histogram remains in negative territory, indicating that downward pressure persists rather than signaling a clear bullish reversal.
On the upside, any attempt to extend the rebound is expected to encounter resistance at the 100-day SMA, located around 0.7074. Above that, additional technical barriers are seen at the 38.2% Fibonacci retracement level at 0.7108 and the 23.6% Fibonacci retracement level at 0.7173.
Key Support Levels in Focus
On the downside, initial support is aligned with the 61.8% Fibonacci retracement at 0.7003. A break below this level would open the door toward the 78.6% retracement area near 0.6928, followed by the previous swing low region around 0.6833, which represents a more substantial technical floor for the pair.
US Dollar Performance Over the Last 30 Days
The following table summarizes percentage changes in the US Dollar against major currencies over the last 30 days, as well as cross-moves among the listed currencies. According to the data, the US Dollar showed its strongest performance versus the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.72% | 1.69% | 2.18% | 2.06% | 2.34% | 2.48% | 2.21% | |
| EUR | -1.72% | -0.05% | 0.46% | 0.36% | 0.54% | 0.74% | 0.50% | |
| GBP | -1.69% | 0.05% | 0.53% | 0.39% | 0.67% | 0.83% | 0.55% | |
| JPY | -2.18% | -0.46% | -0.53% | -0.14% | -0.00% | 0.24% | 0.07% | |
| CAD | -2.06% | -0.36% | -0.39% | 0.14% | 0.09% | 0.38% | 0.16% | |
| AUD | -2.34% | -0.54% | -0.67% | 0.00% | -0.09% | 0.25% | -0.03% | |
| NZD | -2.48% | -0.74% | -0.83% | -0.24% | -0.38% | -0.25% | -0.34% | |
| CHF | -2.21% | -0.50% | -0.55% | -0.07% | -0.16% | 0.03% | 0.34% |
The heat map is read by selecting the base currency from the left column and the quote currency from the top row. For instance, choosing the US Dollar in the left column and tracing across to the Japanese Yen cell provides the percentage move for USD (base)/JPY (quote) over the period shown.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
