Australian Dollar falls as US-Iran conflict lifts USD, GDP data eyed

• AUD/USD retreats as US-Iran strikes boost Dollar demand.
• Rising yields reflect energy-driven inflation and Fed hike risks.
• Australia GDP and US jobs data drive the next catalysts.

The Aussie Dollar retreats some 0.29% against the US Dollar on Tuesday as the escalation of the Middle East conflict boosted the Greenback due to its haven appeal. The AUD/USD trades at 0.7146.

AUD/USD weakens as haven demand and Fed hike bets overshadow US data

Oil prices extended their losses as the US and Iran continue to exchange attacks, even though US President Trump warned Tehran not to retaliate, as they will be “totally wiped out as a country.”

Data-wise, the US economic schedule featured JOLTS job openings for July, which rose to 7.27 million, below estimates. The ISM Manufacturing PMI eased from 55.6 to 54.6 in August, below forecasts but still in expansion territory, indicating a healthy manufacturing sector.

Given the backdrop, US Treasury yields had risen, with the 10-year benchmark note up by over 4 basis points to 4.796%. This is because energy prices are skyrocketing due to the situation in the Strait of Hormuz, prompting investors to price in a nearly 72% chance of a 25-basis-point rate hike by the Federal Reserve, according to Prime Terminal.

Fed Governor Michael Barr was hawkish, saying that if inflation doesn’t moderate soon, he will be ready to raise rates amid a “stable” labour market and a low Unemployment Rate.

Eyes turn to the release of additional jobs data, with the Challenger Job Cuts for August, Initial Jobless Claims, and, on Friday, the crucial August Nonfarm Payrolls report.

In Australia, Wednesday’s economic docket will feature the release of Gross Domestic Product (GDP) data for the second quarter of 2026. GDP is expected to expand by 0.3% QoQ, unchanged from the previous reading, while on an annual basis, most economists foresee a slowdown from 2.5% to 1.8% YoY.

AUD/USD Price Forecast: Technical Outlook

In the daily chart, AUD/USD trades at 0.7147, maintaining a mildly bullish near-term bias as it holds above the cluster of the 50-, 100- and 200-day Simple Moving Averages (SMAs) near 0.7021. The grouping of these longer-duration SMAs below price suggests an underlying upward tone, while the Relative Strength Index (14) around 59 hints at constructive but not overstretched momentum, leaving room for further gains as long as the pair defends the SMA base.

On the topside, initial resistance is located at the horizontal barrier around 0.7198, where a sustained break would open the way for a continuation of the broader advance. On the downside, the grouped SMAs near 0.7021 offer primary support; a daily close back below this area would weaken the bullish structure and signal a deeper corrective phase toward prior swing lows.

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