AUD/USD Outlook: Potential Upside as Pair Stabilizes Above Key Moving Average

The Australian Dollar (AUD) is trading slightly lower against the US Dollar (USD) at approximately 0.6990 during Friday’s European session, pressured by renewed concerns over potential US inflation re-acceleration following June’s slowdown. The US Dollar Index (DXY), measuring the greenback’s strength against six major currencies, has risen 0.1% to near 100.80.

Geopolitical tensions, including elevated energy prices and ongoing Middle East conflicts, are fueling fears of sticky inflation. Iran has further heightened risks by threatening to close the Red Sea if the US targets Iranian infrastructure, while US President Donald Trump recently warned of strikes on Iranian bridges and power plants if negotiations collapse.

Australian Dollar traders are now awaiting June employment data due next week. Technically, AUD/USD remains marginally bullish despite the slight pullback, as spot prices hold above the 20-day exponential moving average (EMA) at 0.6969. The pair has rebounded from late-May lows and is consolidating near this key support level, with the Relative Strength Index (RSI) at 51 indicating neutral-to-positive momentum without overbought conditions.

Downside support is anchored by the 20-day EMA (0.6969) and the July 14 low (0.6913), while a break below the latter could test the March 30 low (0.6833). On the upside, the pair faces resistance near the June 18 high (0.7042).

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