AUDUSD Analysis

Introduction

The AUD/USD is a commodity-linked currency pair, with the Australian Dollar driven by commodity exports such as iron ore, coal, and gold. The pair is sensitive to global risk sentiment, and its price typically rises when global demand for raw materials increases. The Reserve Bank of Australia’s (RBA) interest rate decisions also play a major role in the AUD/USD’s movements. Additionally, the AUD has a strong correlation with the Chinese Yuan, due to Australia's significant trade relations with China.

Fundamentals and Interest Rates

The Reserve Bank of Australia policy is Hawkish with the (RBA) current Interest rate 4.35%. Latest change was May 05, 2026 (25bp)%.
On that side the Federal Reserve policy is Dovish and (FED) has set its interest rate to 3.75% by latest change, Dec 10, 2025 (-25bp).
(RBA) Higher interest rates generally lead to higher returns on investments denominated in AUD. This tends to attract foreign capital into AUD assets.

Based on the economic and macro fundamental data, The Fundamental Bias of AUD is Moderate Bearish and for the USD is Strong Bullish.
Ziwox considering Strong Bearish bias for this asset and we expect prices to decline in the long-term.
mid-term Fundamental Score for AUD is 5. and Fundamental Score for USD is 12. So, base on the Fundamental Score, we predict mid-term downside price movement.

Market Overview & Performance

In the current trading session, "Sydney & Tokyo", Market risk sentiment is Risk-OFF. The British pound and United States Dollar recorded the strongest performance, while the Gold and New Zealand Dollar are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -1.43% decrease against us dollar.
Euro "EUR", performance has been -0.14% down so far
Pond "GBP", performance has been 0.05% up as of now
Australian dollar "AUD", has dropped by -0.25%
New Zealand dollar "NZD", has dropped by -0.78%
Japanese YEN "JPY", experienced -0.16% fall
Swiss franc "CHF", experienced -0.51% fall so far
Canadian dollar "CAD", has lost -0.32%
Due to the market risk sentiment, AUDUSD price reduction is likely. Becasue investors become risk-averse from AUD, seeking safety amid uncertainty or market turmoil, leading to a sell-off in riskier assets and a flight to safe havens like the USD, JPY, and gold. Currencies tied to riskier economies (e.g., AUD, NZD) tend to weaken.

Market Sentiment and Positioning

AUD COT (Commitments of Traders):

Institutions Net Position on >Australian Dollar is 60155 included 129129 long, 68974 short and -25489 position changed from last week.
So they mainly have a bullish view on this asset and bought AUD for higher prices in long-term.
Last week -25489 repositioning Indicates closing positions, short-term profit-taking, or a general pessimism about prices.

USD COT (Commitments of Traders):

Institutions Net Position on >U.S. Dollar Index is 850 included 22732 long, 21882 short and 1329 position changed from last week.
So they mainly have a bullish view on this asset and bought USD for higher prices in long-term.
Last week 1329 repositioning Indicates that they are optimistic about higher prices in mid-term.

Retail Traders:

Crowd traders or Retail traders are bullish on the AUDUSD with 32% 68% ratio. 0 long pos and 0 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability AUDUSD prices may continue to rise.

Technical Levels and Support/Resistance

The AUDUSD pair is approaching a critical technical support level near 0.70904.
Technical trend is Sell, So If the pair continues to weaken, this support could become a significant area to watch for potential reversal or consolidation.
On the upside, there is key resistance near 0.72347. Technically, If the pair continues to the upside, this resistance level could become a significant area to watch for sell entery potential.