AUD/USD jumps above 0.7240 as softer US wage growth offsets Iran hostilities

• AUD/USD climbed despite renewed salvos in the Strait of Hormuz.
• Iran warned its armed forces are fully prepared to respond to any aggression, though markets showed limited panic.
• US Nonfarm Payrolls increased by 115K in April, beating expectations of 62K. Average Hourly earnings decreased to 0.2% MoM, showing a softer wage growth.

The AUD/USD pair surged near the 0.7240 region on Friday as traders digest a combination of escalating Middle East tensions and the latest United States (US) labor market data.

Tensions were high at the end of the week after Fox News reported that the US military carried out additional airstrikes on Friday, hitting several empty tankers attempting to break the blockade. According to the report, the strikes were part of broader efforts to maintain US pressure on Iran's control of the Strait of Hormuz.

At the same time, an Iranian Foreign Ministry spokesperson warned that Tehran’s armed forces are “fully prepared and closely monitoring the situation,” adding that “wherever necessary, they will respond with full force to any aggression or provocation.” These headlines briefly lifted safe-haven demand, although the broader market reaction remained relatively muted, with the US Dollar (USD) holding near weekly lows despite the geopolitical escalation.

On another note, the latest US Nonfarm Payrolls (NFP) report showed that the US economy added 115K jobs in April, above market expectations of 62K, while the Unemployment Rate held steady at 4.3%. Average Hourly Earnings fell to 0.2% MoM.

Short-term technical analysis:

On the four-hour chart, AUD/USD trades at 0.7243, holding a constructive bullish bias as it remains above both the 20-period Simple Moving Average (SMA) near 0.7226 and the 100-period SMA around 0.7178. The cluster of nearby supports suggests dips are being absorbed, while the Relative Strength Index (RSI) at 59 stays in positive territory without yet signaling overbought conditions, hinting that upside pressure could persist while these floors hold.

On the topside, immediate resistance is located at 0.7249, where a horizontal barrier caps the advance and needs to be decisively cleared to open the door to a more extended recovery. On the downside, initial support is seen at the 0.7236 horizontal level, followed by the 20-period SMA and overlapping support around 0.7226, with a deeper cushion emerging at 0.7223 and then the 100-period SMA down at 0.7178, where buyers would be expected to defend the broader uptrend.

(The technical analysis of this story was written with the help of an AI tool.)