AUD/USD rose towards 0.7240 on Friday as markets weighed Middle East developments and new US jobs data. The pair traded around 0.7243.
Fox News reported that the US military carried out more airstrikes on Friday, hitting several empty tankers said to be trying to break a blockade. The report said the action aimed to maintain US pressure on Iran’s control of the Strait of Hormuz.
Middle East Tensions And Market Reaction
An Iranian Foreign Ministry spokesperson said Iran’s armed forces are “fully prepared and closely monitoring the situation” and would respond “with full force” to any aggression or provocation. Safe-haven demand rose briefly, while the US Dollar stayed near weekly lows.
US Nonfarm Payrolls showed 115K jobs were added in April, above expectations of 62K. The Unemployment Rate held at 4.3%, and Average Hourly Earnings slowed to 0.2% month on month.
On the four-hour chart, AUD/USD remains above the 20-period SMA near 0.7226 and the 100-period SMA around 0.7178. The RSI is 59.
Resistance is at 0.7249, with support at 0.7236 and 0.7226, then 0.7223 and 0.7178. The technical section was produced with help from an AI tool.
Market Outlook And Key Drivers
The current strength in the Aussie dollar, pushing toward 0.7240, seems to be ignoring the obvious geopolitical risks in the Middle East. The US dollar’s muted reaction is likely tied to today’s mixed jobs report, where weak wage growth is overshadowing the headline payroll number. This suggests the market is more focused on the potential for a less aggressive Federal Reserve for now.
In the coming weeks, we should watch the upcoming US Consumer Price Index data closely, as forecasts are pointing to a continued cooling to around 3.1%. This would reinforce the idea of a dovish Fed, especially when contrasted with the Reserve Bank of Australia, which has signaled a firm hold. This policy divergence is a key factor supporting the Aussie.
We must also consider the support from commodity prices, as iron ore recently climbed back above $120 per tonne. This boost provides a fundamental tailwind for the AUD that is separate from the US dollar’s weakness. As long as these prices remain firm, dips in the AUD/USD pair will likely find buyers.
Despite the bullish momentum, the situation in the Strait of Hormuz is a wildcard that could reverse this trend instantly. We remember how the pair struggled to break past 0.6800 for most of 2025, showing how quickly sentiment can shift. Buying some cheap, out-of-the-money puts on the AUD/USD or calls on the VIX could be a prudent hedge against a sudden spike in risk aversion.
From a technical standpoint, with the pair holding above the 20-period moving average near 0.7226, selling cash-secured puts at that level or slightly below could be a viable strategy to collect premium. Alternatively, for those expecting a break of the 0.7249 resistance, a bull call spread would define the risk while positioning for further upside. The key is to wait for a decisive move past that immediate resistance.
