Australian Dollar Rallies on Improved Risk Sentiment, Key Levels Ahead

The Australian dollar saw an improvement in risk sentiment after easing Middle East tensions and stronger US economic data, causing AUD/USD, AUD/JPY, and AUD/NZD to rise. However, these currency pairs are approaching important technical levels that could determine whether the rally continues or fades.

Risk appetite was boosted by prospects that the Strait of Hormuz could reopen, lifting Wall Street sentiment. The S&P 500 and Dow Jones reached record highs, while the Nasdaq closed in on 30,000.

AUD/USD is approaching a key resistance level at 0.7100, while AUD/JPY faces heavy resistance around the 111.00 handle and prior intervention levels. AUD/NZD bears are defending the 1.20 handle, with risks skewed to the downside until a break or daily close above this level.