The Australian dollar (AUD) showed strength against major currencies, gaining 0.28% to trade at about 0.7018 against the US dollar (USD) during European trading on Tuesday. This rise reflects a shift in market sentiment, as investors seemed more optimistic, particularly with hopes that the ongoing hostilities between the US and Iran might be winding down.
In the European market, S&P 500 futures are up by 0.45%, sitting near 7,477, signaling a generally positive outlook. Meanwhile, the U.S. Dollar Index (DXY), which measures the dollar against six key currencies, dipped by 0.11% to around 100.89, suggesting a reduced appeal for the dollar as a safe-haven asset.
On another note, Iran confirmed it received a proposal from a mediator that suggests a 10-day halt in strikes to explore options for revitalizing the interim agreement.
Back in Australia, attention is turned to the employment figures scheduled for release on Thursday. The data is expected to reveal an addition of about 15,000 jobs for June, a drop from 43,000 created in May, with the unemployment rate likely remaining steady at 4.4%.
This week, investors will also be watching for preliminary private sector Purchasing Managers’ Index (PMI) figures from both Australia and the US, set to be released on Friday.
AUD/USD Technical Analysis
AUD/USD is currently strengthening around 0.7016, maintaining a positive outlook with the exchange rate above the 20-day exponential moving average (EMA) of 0.6975. This suggests the emergence of demand following a recent recovery. The Relative Strength Index (RSI) at 55.8 indicates that momentum is supportive, hinting at growing bullish pressure without reaching overbought levels just yet.
Looking at potential support levels, immediate support can be found at the 20-day EMA around 0.6975, with further support at the June 30 low of 0.6865. On the upside, there’s a possibility for the pair to extend its recovery towards 0.7100.
Economic Indicators
Employment Change SA
The Australian Bureau of Statistics reports employment changes across the country, adjusted for seasonal trends. Typically, increased employment volatility positively influences consumer spending and promotes economic growth, which is bullish for the Australian dollar (AUD). Conversely, lower figures may indicate a bearish outlook.
