The Australian Dollar (AUD) held steady on Monday despite fresh geopolitical tensions. The United States’ airstrikes on Iranian nuclear sites caused a risk-off market open, pushing the US Dollar (USD) higher while oil prices gapped up.
However, the AUD/USD quickly rebounded after Iran’s retaliation failed to disrupt major oil flows or trigger further escalation. Reports confirmed that Iran’s missile attacks on US bases in Qatar caused no casualties, which helped stabilize risk sentiment.
Dovish comments from Fed Governor Michelle Bowman further weighed on the US Dollar. She indicated that inflation was cooling and signaled support for a possible rate cut in July, prompting a softening in the strength of the USD.
Australia’s own PMI data released on Sunday failed to move the market. Traders focused instead on US monetary policy and global risk headlines. The AUD/USD climbed back above its 200-day SMA as geopolitical fears eased and attention shifted to Powell’s upcoming testimony.
The AUD/USD shows intense volatility following the US strikes on Iran. The drop in the US Dollar Index has triggered positive momentum in the pair. Additionally, surging demand for commodities has boosted the Australian Dollar.
The pair has found strong support around the 0.6400 level, signaling further upside potential. The emergence of an ascending broadening wedge within the symmetrical broadening wedge shows intense volatility in the pair.
