The past few days have provided AUDUSD with some support, as news of the US-Iran de-escalation weighed on the American dollar. Declining geopolitical tensions have improved market sentiment and reduced demand for the greenback as a safe haven—a positive factor for the pair in the short term.
Following three rate hikes since the beginning of the year, the Reserve Bank of Australia (RBA) kept borrowing costs unchanged at 4.35% at today’s meeting. On the one hand, this decision underscores the regulator’s hawkish posture and underpins the national currency. On the flip side, fresh economic data suggests a slowdown. GDP growth in the first quarter of 2026 was just 0.3%, while the annual figure hovered around 2.5%. If the next report is also disappointing, the RBA could consider policy easing.
Across the Pacific, the Federal Reserve (Fed) is expected to hold interest rates at 3.75%. A strong labor market report for May—released earlier—has bolstered market confidence in the central bank's commitment to maintaining an aggressive stance for longer. This should create a favorable environment for the American dollar.
All in all, AUDUSD’s fundamental picture looks moderately optimistic. Easing geopolitical tensions and the RBA’s tight policy, combined with hawkish comments regarding the future monetary path, are now supporting the pair.
The ultimate recommendation is to buy AUDUSD at the current price, targeting 0.72750 within a couple of weeks. To mitigate the risk of adverse market movements, place a Stop Loss order slightly below support, namely at 0.70000.
This content is for informational purposes only and is not intended to be investing advice.
