AUD/USD Recovers Slightly But Struggles Below 0.6500 Amid Geopolitical Risk-Off Mood

AUD/USD Recovers Some Ground But Struggles to Break Above 0.6500

The Australian Dollar (AUD) has staged a mild recovery after a steep decline earlier on Friday, as market panic over the escalating conflict between Israel and Iran triggered broad risk aversion. This pushed the AUD/USD pair sharply lower, with the pair briefly dropping to near 0.6450, its lowest level in over a week.

As European markets opened, the AUD/USD saw a modest rebound, although the pair remains firmly capped below the 0.6500 level, a former support now acting as short-term resistance.

Risk-Off Flows Boost Safe-Haven USD

The initial sell-off in the Aussie was triggered by reports of Israeli airstrikes on Iranian military and nuclear facilities, sparking concerns over a broader regional conflict. The US Dollar (USD) benefited from its safe-haven appeal, gaining across the board as risk-sensitive currencies like the AUD came under pressure.

Related Read: US Dollar Index Forecast: Risk-Off Keeps DXY Supported

AUD/USD Technical Outlook

• Support: 0.6450 (recent low)
• Resistance: 0.6500 (former support now resistance)
• Momentum: Remains bearish unless the pair breaks cleanly above 0.6500 on risk reversal

Market participants are now looking ahead to US consumer sentiment data and developments in the Middle East, which could further influence risk sentiment and drive short-term moves in the AUD/USD pair.

Conclusion

While the Aussie is managing to rebound from intraday lows, lingering geopolitical tensions and broad USD strength suggest that AUD/USD may struggle to sustain upward momentum unless sentiment improves significantly.