AUD/USD rallies as Iran-US deal hopes outweigh strong ADP jobs data

AUD/USD surges near the 0.7240 price region, supported by improving risk sentiment after Axios reported that the United States (US) and Iran are moving closer to a deal aimed at ending the conflict. At the time of writing, the pair trades at 0.7239 after hitting a daily high of 0.7277, its highest level since June 2022.

These developments have alleviated fears of a prolonged disruption to global energy flows, increasing demand for risk-sensitive currencies such as the Australian Dollar (AUD). A more stable geopolitical outlook has also reduced safe-haven demand for the US Dollar (USD), allowing the AUD/USD pair to recover some lost ground.

However, the pair's upward movement is constrained by stronger-than-expected United States (US) private-sector employment data. The ADP Employment Change report revealed that US employers added 109,000 jobs in April, surpassing market expectations of 99,000 and improving from a revised 61,000 increase in March.

Nela Richardson, Chief Economist at ADP, noted that hiring remains uneven, with small and large employers actively hiring, while mid-sized firms show signs of weakness. This data reinforces the perception that the US labor market remains resilient, limiting downward pressure on the US Dollar.

Short-term technical analysis:

On the four-hour chart, AUD/USD trades at 0.7239, holding a constructive bullish bias as it consolidates above both the 20-period Simple Moving Average (SMA) at 0.7197 and the 100-period SMA at 0.7166. The pair is probing a tight overhead band, while the Relative Strength Index (RSI) near 63 suggests firm but not yet overbought upside momentum, keeping the door open for further gains if nearby resistance gives way.

On the topside, immediate resistance emerges at 0.7242, with a subsequent barrier at 0.7251, where sellers may attempt to cap the advance. On the downside, initial support is seen at 0.7232 followed by 0.7229, while deeper pullbacks would look to the 20-period SMA at 0.7197 and the 100-period SMA at 0.7166 to maintain the broader constructive structure.

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