The AUD/USD currency pair declined by 0.22% to trade near 0.7035 in early European trading on Friday, pressured by a rebound in the US Dollar (USD) following Iran's denial of agreeing to a Memorandum of Understanding (MoU) with the United States, despite earlier claims by President Donald Trump that such an agreement had been reached by Tehran's leadership [1]. The US Dollar Index (DXY), which measures the Greenback against six major currencies, rose by 0.15% to approximately 99.85 during the same period [1].
President Trump stated on Thursday that planned attacks on Iran had been called off and that the details of a peace deal had been approved in concept and detail by all parties. However, he emphasized that the US naval blockade on Iranian sea ports would remain until the deal is finalized [1].
The Australian Dollar (AUD) is trading cautiously ahead of the Reserve Bank of Australia's (RBA) upcoming monetary policy decision, scheduled for Tuesday. According to a Reuters poll, the RBA is expected to pause its monetary tightening cycle and keep the Official Cash Rate (OCR) unchanged at 4.35%, after having raised rates by 75 basis points earlier this year [1].
From a technical perspective, AUD/USD remains bearish in the near term, trading below the 20-day exponential moving average (EMA) at 0.7103 and the 50% Fibonacci retracement at 0.7054. The pair is just above the 61.8% retracement at 0.7002, with the Relative Strength Index (14) at around 39, indicating weak downside momentum. Key support levels are identified at 0.7002, 0.6929, and 0.6834, while resistance is seen at 0.7054, 0.7103, and 0.7106. A decisive break above these resistance levels could open further upside potential toward 0.7171 and 0.7274 [1].
Market participants are closely watching the RBA's decision, as a hawkish stance or rate hike is typically bullish for the AUD, while a dovish stance or unchanged rates is seen as bearish [1].
CONCLUSION
The AUD/USD pair is under pressure due to a stronger US Dollar and cautious sentiment ahead of the RBA's interest rate decision, with markets expecting the central bank to keep rates unchanged at 4.35% [1]. Technical indicators suggest a bearish outlook unless key resistance levels are breached. The market's focus remains on the RBA's upcoming announcement for further direction.