The Australian Dollar (AUD) maintained a firm stance against the US Dollar (USD), with the AUD/USD pair trading near 0.7070 on Wednesday, as improved risk sentiment followed recent developments in the US-Iran conflict [1]. US President Donald Trump defended the ceasefire framework with Iran, stating that the Strait of Hormuz had reopened, but warned that bombing could resume if Tehran 'acts up' [1]. Shipping data indicated that several Iranian oil tankers had passed through the Strait of Hormuz after the US-Iran framework deal, raising expectations that Middle East oil supply could return to the market [1]. This prospect of lower energy prices supported risk-sensitive currencies like the Aussie, although uncertainty remains high [1].
Investors are also cautious ahead of the Federal Reserve’s June policy decision, which will be the first meeting led by Kevin Warsh. The Fed is expected to keep interest rates unchanged in the 3.50%-3.75% range, as policymakers balance easing oil-related inflation against still-elevated headline inflation and solid US economic activity [1].
Technical analysis shows that AUD/USD trades at 0.7070, holding a mild bullish bias above the 20-period Simple Moving Average (SMA) at 0.7064, but capped by the 100-period SMA at 0.7101. The Relative Strength Index (RSI) around 55 suggests steady, rather than impulsive, upside momentum as price grinds higher within a tight range [1]. Immediate resistance is at 0.7074, with the 100-period SMA at 0.7101 as the next hurdle if buyers extend the move. Initial support is seen at 0.7065, reinforced by the 20-period SMA at 0.7064 and additional horizontal levels at 0.7058 and 0.7054, where a break could lead to a deeper corrective pullback [1].
CONCLUSION
The Australian Dollar has benefited from improved risk sentiment following Trump’s comments on the US-Iran ceasefire and the reopening of the Strait of Hormuz, with technical indicators showing mild bullish momentum. However, uncertainty persists ahead of the Federal Reserve’s policy decision, and the AUD/USD remains within a tight trading range. Market participants are watching for further developments in both geopolitical and monetary policy spheres.