AUD/USD Rebounds Toward Key Resistance as Iran Deal Optimism Weighs on US Dollar The Australian Dollar started the week on a firmer footing, pushing back toward the 0.7080 region after recovering from last week's lows. The move comes as investors continue to digest reports that the United States and Iran have reached a framework agreement aimed at ending months of geopolitical tensions, a development that has significantly altered market sentiment. As fears surrounding the Strait of Hormuz begin to fade, traders have become less defensive, reducing demand for the US Dollar and allowing risk-sensitive currencies such as the Australian Dollar to regain some lost ground. The shift in sentiment has been noticeable across financial markets. Only a week ago, investors were preparing for the possibility of prolonged conflict, higher energy prices and renewed inflation concerns. Now, attention has turned toward the economic implications of a potential peace agreement. If the deal is formally signed and the Strait of Hormuz fully reopens, energy supply disruptions could ease considerably, reducing inflation pressures that have troubled policymakers in recent months. That change has already begun to influence interest-rate expectations, with traders scaling back the probability of another Federal Reserve rate hike later this year. For the Australian Dollar, however, the story is not entirely straightforward. While a softer US Dollar has provided support, domestic monetary policy expectations remain a limiting factor. Markets have largely ruled out any action from the Reserve Bank of Australia at this week's meeting and have also reduced expectations for an August rate increase. Investors are increasingly focused on upcoming inflation figures, which may ultimately determine whether policymakers need to maintain a tightening bias. Until then, the Australian Dollar may struggle to generate the kind of momentum needed for a sustained breakout. Looking at the daily chart, the recovery from the recent low near 0.7000 is encouraging for buyers, but it has yet to fully change the broader technical picture. Price has climbed back toward an important resistance zone around 0.7080, where multiple moving averages are converging. This area has acted as a barrier in recent sessions and could once again attract selling interest. What stands out on the chart is that despite the sharp rebound, buyers have not yet managed to reclaim control of the medium-term trend. The market appears to be testing resistance rather than breaking it. Momentum indicators reinforce that cautious view. The Relative Strength Index remains below the neutral 50 mark, suggesting that bullish momentum is improving but not yet dominant. Meanwhile, the MACD remains in negative territory despite showing signs of stabilization. This combination often appears during corrective rebounds inside broader consolidations. In other words, the recent advance is meaningful, but it has not yet delivered the type of signal that would confirm a larger trend reversal. Traders will likely want to see a decisive move above resistance before becoming more aggressive on the long side. For now, the immediate focus remains on the 0.7080–0.7100 region. A convincing break above that zone could expose the next upside targets near 0.7130 and 0.7150, where previous swing highs may come into play. On the downside, support is located around 0.7030, followed by the psychologically important 0.7000 level. As long as price remains trapped between those boundaries, the pair may continue to trade in a relatively choppy manner. The broader outlook has improved thanks to easing geopolitical tensions, but with RBA expectations softening and key resistance still intact, traders may prefer to wait for stronger confirmation before declaring that a more durable bullish phase has begun.
