AUD – Trump's cancellation of strikes boosts risk appetite, keeping the Australian dollar stagnant at high levels

US President Trump canceled a planned military strike against Iran, citing an "imminent agreement" on the nuclear program and the full reopening of the Strait of Hormuz. This significantly improved risk appetite, providing support for the Australian dollar. However, Iranian officials denied Trump's claims, calling them "just another lie," and uncertainty remains in the Middle East. Trump stated on Saturday that the suspension of strikes was based on expectations of an "imminent agreement" and a response to requests from Iran and other countries in the region.

Additionally, the Reserve Bank of Australia's hawkish stance continued to support the Australian dollar. The market has fully priced in at least one more rate hike this year. RBA Governor Bullock warned last week that core inflation remains too high and may require further slowing of domestic demand to curb prices, stating that policymakers are "prepared to raise rates again if necessary."

After falling for three consecutive days at the beginning of last week, the Australian dollar rebounded significantly on Thursday, reaching 0.7044 on Friday, its highest level since June 17. Over the past two weeks, the exchange rate has been capped by the 0.7030 level and the 50-day moving average, but a preliminary breakout has been seen, breaking out of the recent trading range and suggesting a potential new upward trend for the Australian dollar. However, a challenge remains: the 100-day moving average, which provided support at the end of March, saw a further decline after breaking below it in early June. Therefore, the 100-day moving average at 0.7060 still holds some technical significance; the expected targets are 0.7120 and 0.72, with the May 6 high of 0.7277 serving as a further reference. Support levels are seen at 0.70 and 0.6940, with stronger support at 0.6860 and the 250-day moving average at 0.6830.

Forecast range:
Resistance: 0.7030** – 0.7060* – 0.7120 – 0.7200
Support: 0.6950 - 0.6900 - 0.6860 - 0.6830 – 0.6700**
 

Any questions? contact our professional analysis team