The AUD/USD pair has seen a rise, hovering around the 0.7240 mark, thanks to a better risk appetite after Axios reported that the US and Iran are nearing a deal to resolve their ongoing conflict. Currently, the pair is trading at 0.7239, having reached a daily peak of 0.7277, the highest level since June 2022.
These developments have eased concerns about potential disruptions in global energy supplies and bolstered demand for currencies like the Australian dollar (AUD), which are sensitive to risk. A more stable geopolitical environment has reduced the appeal of the safe-haven US dollar (USD), allowing the AUD/USD pair to regain some of its earlier losses.
However, stronger-than-expected employment data from the US has somewhat limited the pair’s advances. In April, employers added 109,000 jobs, surpassing predictions of 99,000 and improving from a revised increase of 61,000 in March, as reported by ADP.
Nela Richardson, ADP’s chief economist, noted that job growth is uneven; while both small and large businesses are hiring robustly, mid-sized companies appear to be lagging. This data indicates that the US labor market remains resilient, which helps support the US dollar’s value.
Short-term technical analysis:
On the 4-hour chart, the AUD/USD is trading at 0.7239, maintaining a bullish stance above the 20-period simple moving average (SMA) at 0.7197 and the 100-period SMA at 0.7166. The pair is navigating a tight resistance zone, with a relative strength index (RSI) around 63 indicating solid upside momentum, but not yet in overbought territory, suggesting potential for further gains if resistance is broken.
Looking upwards, immediate resistance is seen at 0.7242, with a further barrier at 0.7251 where sellers might step in. On the downside, initial support is at 0.7232, followed by 0.7229; however, a more significant pullback could test the 20-period SMA at 0.7197 and the 100-period SMA at 0.7166 to maintain the overall positive trend.
