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AUD/USD Price Forecast: Defends 100-SMA on Iran de-escalation hopes; bearish bias persists

  • AUD/USD edges higher on Tuesday and snaps a seven-day losing streak to a two-month low.
  • Hawkish RBA Minutes and upbeat China’s PMIs support the Aussie amid a modest USD slide.
  • Reports that Trump is open to ending the war without the Hormuz condition weigh on the USD.

The AUD/USD pair finds some support ahead of the 100-day Simple Moving Average (SMA) on Tuesday and stages a modest recovery from the vicinity of an over two-month low, touched the previous day. Spot prices, for now, seem to have snapped a seven-day losing streak, though the upside remains capped amid persistent geopolitical uncertainties.

The Australian Dollar (AUD) draws some support from the hawkish Reserve Bank of Australia (RBA) March meeting Minutes, which revealed that most members judged further rate hikes likely necessary to return inflation to target. The central bank added that sustained higher oil prices, driven by Middle East tensions, would boost inflation more broadly over time. This implies that further tightening was likely even as some policymakers raised concerns about stagflation risks.

Adding to this, data released by the National Bureau of Statistics (NBS) showed that China’s official Manufacturing PMI returned to expansionary territory in March and rose to a one-year high level of 50.4, up from 49.0 in February. Adding to this, the non-manufacturing PMI, which captures activity in services and construction, also climbed to 50.1 from 49.5, indicating a modest stabilisation across the wider economy and further offering support to the China-proxy Aussie.

The US Dollar (USD), on the other hand, retreats slightly after touching a fresh high since May 2025 and turns out to be another factor acting as a tailwind for the AUD/USD pair. The Wall Street Journal reported that US President Donald Trump is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed. This triggers a corrective fall in Crude Oil prices and eases inflationary concerns, undermining US Treasury bond yields and the USD.

That said, Trump issued a stark warning on Monday that the US could launch massive strikes on Iran's energy infrastructure if a deal is not reached soon and if the Strait of Hormuz is not immediately reopened. Furthermore, Iran had signaled reluctance to engage in direct negotiations with the US, highlighting fragile diplomatic progress. Furthermore, the US is still deploying additional troops and assets to the region, which keeps geopolitical risks in play and limits USD losses.

Meanwhile, the uncertainty over the de-escalation of tensions in the Middle East acts as a tailwind for Crude Oil prices, which continues to fuel expectations about the war-driven spike in inflation and hawkish US Federal Reserve (Fed) outlook. In fact, traders are rapidly increasing bets for a Fed rate hike by the end of this year. This, in turn, favors the USD bulls and warrants some caution before confirming that the AUD/USD pair has bottomed out and positioning for further gains.

AUD/USD daily chart

Chart Analysis AUD/USD

Technical Analysis:

The AUD/USD pair defends the rising 100-day Simple Moving Average (SMA) support, which is closely followed by the 50% Fibonacci retracement level of the November-March move higher. The latter is pegged around the 0.6800 mark, which could act as a key pivotal point. A break below there would expose the 61.8% Fibo. retracement at 0.6713 as the next key support, followed by the prior reaction low at the 0.6670-0.6665 horizontal zone, where a stronger demand response would be expected if the broader uptrend is to remain intact.

On the topside, immediate resistance now stands at the 38.2% Fibo. retracement at 0.6892, followed by the 0.7000 psychological barrier, or the 23.6% Fibo. level, where the prior breakdown point converges with the upper end of the recent consolidation. A daily close back above the said handle would ease the bearish tone and reopen the path toward the 0.7100 round figure and the 0.7182 swing high.

(The technical analysis of this story was written with the help of an AI tool.)

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Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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