Australian Dollar rebounds as softer US Dollar supports risk sentiment

Trump says the Iran deal is signed and the Strait of Hormuz is open.
Improved risk sentiment supports the Australian Dollar.
Traders await the RBA policy decision for fresh direction.

Agustin Wazne FXStreet

The AUD/USD pair rebounds near the 0.7080 region on Monday amid improved risk sentiment following reports of a preliminary United States (US)-Iran peace agreement. At the time of writing, the Australian Dollar (AUD) rises 0.46% against the US Dollar (USD), hitting its highest level in a week.

US President Donald Trump said that the Iran deal had been signed and that the Strait of Hormuz had reopened. Trump stated that “the deal’s all signed” and added that the Strait is all opened, reinforcing hopes that geopolitical tensions in the Middle East could ease. He also noted that it was “important that oil is plummeting and stocks rising,” comments that supported market optimism and weighed on safe-haven demand for the US Dollar.

The Australian Dollar’s upside remains limited ahead of the Reserve Bank of Australia’s (RBA) monetary policy decision on Tuesday, with the central bank expected to hold rates at 4.35%.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7078, maintaining a mildly bullish near-term bias as it holds above the 20-period Simple Moving Average (SMA) at 0.7037 and recent horizontal support levels at 0.7072 and 0.7065. The pair is pressing into a nearby resistance cluster around 0.7082–0.7089, while the 100-period SMA at 0.7110 serves as a higher cap; the Relative Strength Index (RSI) at around 60 suggests constructive but not overextended upside momentum as long as price remains supported above the aforementioned floors.

On the topside, initial resistance is seen at 0.7082, followed by 0.7089, with the 100-period SMA at 0.7110 acting as a more significant barrier that would need to be reclaimed to open a stronger advance. On the downside, immediate support is aligned at 0.7072, ahead of 0.7065, while a deeper pullback toward the 20-period SMA at 0.7037 would still leave the broader four-hour structure mildly constructive unless that moving average gives way.

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

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

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