The Australian Dollar (AUD) outperformed its major currency peers, trading 0.28% higher to near 0.7018 against the US Dollar (USD) during the European trading session on Tuesday [1]. This strength was attributed to a shift in market sentiment towards risk-on, driven by hopes that the United States and Iran could soon halt the exchange of attacks [1]. The AUD was the strongest against the Japanese Yen, gaining 0.32% [1]. In comparison, the US Dollar Index (DXY), which tracks the Greenback against six major currencies, traded 0.11% lower to near 100.89, indicating a reduced demand for safe-haven assets [1].
S&P 500 futures also reflected the upbeat market mood, rising 0.45% to near 7,477 during European trade [1]. On the geopolitical front, Iran confirmed on Monday that it had received a proposal from mediators for a 10-day cessation of strikes to explore ways to revive the interim deal [1].
Looking ahead, investors are awaiting the release of Australia's June employment data on Thursday. The labor market report is expected to show the creation of 15,000 new jobs, down from 40,300 in May, while the unemployment rate is projected to remain steady at 4.4% [1]. Additionally, preliminary Purchasing Managers’ Index (PMI) data for July from both Australia and the US will be released on Friday, which could further influence market direction [1].
From a technical perspective, AUD/USD is trading higher at around 0.7016, maintaining a constructive near-term tone as the spot rate remains above the 20-day exponential moving average (EMA) at 0.6975. The Relative Strength Index (RSI) has advanced to 55.8, suggesting that bullish pressure is building, though not yet overbought [1].
CONCLUSION
The Australian Dollar's recent gains reflect improved risk sentiment and optimism regarding US-Iran tensions. Market participants are closely watching upcoming Australian employment and PMI data, which could determine the sustainability of the AUD's upward momentum.