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AUD/USD and USD/CAD waver as Middle East risks lift the US dollar

Traders are likely to watch Australia’s labor market data and weekly US crude oil inventory figures for the next moves in the pairs.

Reported · Written up by our desk · Major Pairs

Geopolitical tensions in the Middle East are weighing on risk-sensitive, commodity-linked currencies, with US dollar demand rising as uncertainty increases, Action Forex said. The US maintained strikes on targets in Iran, while Tehran-backed Houthis intensified threats to shipping in the Red Sea and near key oil transit routes, according to the outlet.

That risk backdrop is supporting the dollar, while pressuring currencies such as the Australian dollar, Action Forex added. Looking ahead, participants are expected to focus on Australia’s upcoming labor market report, where employment growth is forecast to slow sharply, and the unemployment rate is expected to stay at 4.4%.

For AUD/USD, Action Forex noted the pair has begun to lose upside momentum after testing resistance around 0.7000 to 0.7030, and a doji on the daily chart suggests renewed downside toward 0.6920 to 0.6870. A decisive break and close above 0.7030 could instead reopen gains toward 0.7080 to 0.7100.

On USD/CAD, the outlet said the pair formed a bullish engulfing pattern after rebounding from support at 1.4000, pointing to a potential recovery toward 1.4170 to 1.4200 if the pattern holds. If 1.4000 breaks, Action Forex said the next downside area sits around 1.3900 to 1.3940, with attention also on weekly US crude oil inventory data.

Latest closeWTI crude $87.52 ▲3.1%

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