The Australian Dollar (AUD) declined against the US Dollar (USD) on Monday, with the AUD/USD pair trading near the 0.7160 region. This movement was primarily driven by the strengthening of the US Dollar following the release of stronger-than-expected US manufacturing data. Specifically, the Institute for Supply Management (ISM) Manufacturing PMI rose to 54 in May, up from 52.7 in April and exceeding market expectations of 53, indicating accelerating growth in the US manufacturing sector [1].
In addition to the positive US economic data, renewed geopolitical tensions contributed to the pressure on risk-sensitive currencies like the Australian Dollar. Reports that Iran halted message exchanges with the US after attacks on Lebanon revived concerns about broader tensions in the Middle East, which in turn boosted demand for the US Dollar and other defensive assets [1].
From a technical perspective, the AUD/USD pair trades at 0.7161, maintaining a neutral-to-mildly-constructive tone. The pair is positioned above the 20-period Simple Moving Average (SMA) at 0.7156 but remains capped by the 100-period SMA at 0.7175, suggesting consolidation within a tight range. The Relative Strength Index (RSI) stands at 50.0, indicating balanced momentum after the recent bounce. Key resistance is noted at 0.7163 and 0.7175, while support levels are found at 0.7156, 0.7152, 0.7148, and a more significant floor at 0.7135. A decisive move outside the 0.7135–0.7175 band is expected to define the next directional trend [1].
CONCLUSION
Stronger-than-expected US manufacturing data and renewed geopolitical tensions have weighed on the Australian Dollar, supporting the US Dollar. The AUD/USD pair remains in a consolidation phase, with market participants watching for a breakout from the current trading range to signal the next move.