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Risk Appetite Improves as Iran Peace Hopes Weigh on Dollar and Lift FX Markets | 7th May 2026

Risk Appetite Improves

Forex markets are maintaining a risk-on tone today as optimism surrounding a potential US–Iran peace agreement continues to weaken the US Dollar and support higher-yielding and risk-sensitive currencies. The Australian and New Zealand Dollars are gaining traction, EUR/USD is holding near multi-week highs, while commodity-linked currencies remain mixed as falling crude oil prices offset broader improvements in market sentiment.

AUD/USD Forecast

Current Price and Context

The Australian Dollar (AUD/USD) is recovering recent losses following the release of Trade Balance data, with improving sentiment helping the pair stabilize. Price action reflects renewed buying interest amid softer USD conditions.

Key Drivers

• Geopolitical Risks: Iran peace hopes are improving overall market sentiment and reducing demand for safe-haven assets.

• US Economic Data: Softer USD conditions are supporting AUD recovery.

• FOMC Outcome: Neutral Fed expectations continue to limit aggressive USD upside.

• Trade Policy: Positive trade data supports confidence in the Australian economy.

• Monetary Policy: Stable RBA expectations support gradual upside.

Technical Outlook

• Trend: Mildly bullish.

• Resistance: 0.7050

• Support: 0.6950

• Forecast: Further upside likely if risk appetite remains strong.

Sentiment and Catalysts

• Market Sentiment: Bullish.

• Catalysts: Trade data and USD direction.

AUD/JPY Forecast

Current Price and Context

AUD/JPY is trading above the 113.00 level, maintaining bullish momentum as risk appetite improves across global markets. Price action remains supported above key technical averages.

Key Drivers

• Geopolitical Risks: Easing tensions are reducing demand for the safe-haven Japanese Yen.

• US Economic Data: Stable global conditions support carry trades.

• FOMC Outcome: Neutral Fed stance supports broader market stability.

• Trade Policy: Stable Asia-Pacific trade outlook supports AUD demand.

• Monetary Policy: Divergence between RBA and BoJ continues to favor AUD/JPY upside.

Technical Outlook

• Trend: Bullish.

• Resistance: 114.50

• Support: 112.00

• Forecast: Near-term outlook favors continued upside while above support.

Sentiment and Catalysts

• Market Sentiment: Bullish.

• Catalysts: Risk sentiment and geopolitical developments.

EUR/USD Forecast

Current Price and Context

EUR/USD is trading above the mid-1.1700 region and remains close to a two-week high as peace hopes surrounding US–Iran negotiations undermine the US Dollar. Price action reflects broad USD softness.

Key Drivers

• Geopolitical Risks: Improved geopolitical sentiment is weakening safe-haven demand for USD.

• US Economic Data: Softer Dollar conditions are
supporting EUR/USD upside.

• FOMC Outcome: Stable Fed expectations are limiting USD strength.

• Trade Policy: Stable Eurozone outlook continues to support the Euro.

• Monetary Policy: ECB stability contrasts with fading USD momentum.

Technical Outlook

• Trend: Bullish.

• Resistance: 1.1800

• Support: 1.1680

• Forecast: Continued upside likely while USD remains weak.

Sentiment and Catalysts

• Market Sentiment: Bullish.

• Catalysts: US Dollar movement and geopolitical developments.

USD/CAD Forecast

Current Price and Context

USD/CAD remains relatively flat as falling crude oil prices offset broader USD weakness. Price action reflects balanced pressure between softer USD conditions and weaker energy markets.

Key Drivers

• Geopolitical Risks: Easing tensions are reducing safe-haven demand for USD.

• US Economic Data: Softer USD conditions are limiting upside in the pair.

• FOMC Outcome: Neutral Fed expectations support consolidation.

• Trade Policy: Falling crude oil prices are weighing on the Canadian Dollar.

• Monetary Policy: Balanced outlook between Fed and Bank of Canada.

Technical Outlook

• Trend: Sideways.

• Resistance: 1.3650

• Support: 1.3500

• Forecast: Range-bound movement likely while oil prices remain weak.

Sentiment and Catalysts

• Market Sentiment: Neutral.

• Catalysts: Oil prices and USD direction.

NZD/USD Forecast

Current Price and Context

NZD/USD is trading above the 0.5950 level, gaining traction as improving geopolitical sentiment weakens the US Dollar. Price action reflects stronger demand for risk-sensitive currencies.

Key Drivers

• Geopolitical Risks: Iran peace deal hopes are supporting global risk appetite.

• US Economic Data: Softer USD conditions continue to support NZD/USD gains.

• FOMC Outcome: Stable Fed expectations limit USD upside.

• Trade Policy: Stable regional trade outlook supports NZD demand.

• Monetary Policy: Balanced policy outlook supports gradual upside.

Technical Outlook

• Trend: Bullish.

• Resistance: 0.6000

• Support: 0.5900

• Forecast: Further upside possible if risk sentiment remains positive.

Sentiment and Catalysts

• Market Sentiment: Bullish.

• Catalysts: USD weakness and geopolitical updates.

Wrap-Up

Forex markets remain tilted toward a risk-on environment as improving optimism around a potential US–Iran peace agreement continues to weaken the US Dollar and support major risk-sensitive currencies, while traders monitor whether easing geopolitical tensions can sustain the current bullish momentum across FX markets despite softer oil prices.

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Moneta Markets is a trading name of Moneta Markets (Pty) Ltd, an authorised Financial Service Provider (“FSP”) registered and regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa under license number 47490 and located at 18 Cavendish Road, Claremont, Cape Town, Western Cape, 7708 South Africa. Company Registration Number: 2016 / 063801 / 07. Contact Phone Number: +27 (10) 1429139. Operational Office: 18 Cavendish Road, Claremont, Cape Town, Western Cape, 7708 South Africa.

Moneta Markets is a trading name of Moneta Markets Ltd, registered under Saint Lucia Registry of International Business Companies with registration number 2023-00068.

Moneta Markets Trading Limited is regulated by the Financial Services Commission (FSC) of Mauritius, with Company No. 211285 GBC and License No. GB24203391. Its registered office is located at Suite 201, 2nd Floor, The Catalyst, 40 Silicon Avenue, Ebene Cybercity, Mauritius.

Mmonexia Ltd registered in the Republic of Cyprus with registration number HE436544 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus.
Legal Information:
Moneta Markets is a trading name of Moneta Markets (Pty) Ltd, an authorised Financial Service Provider (“FSP”) registered and regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa under license number 47490 and located at 18 Cavendish Road, Claremont, Cape Town, Western Cape, 7708 South Africa. Company Registration Number: 2016 / 063801 / 07. Contact Phone Number: +27 (10) 1429139. Operational Office: 18 Cavendish Road, Claremont, Cape Town, Western Cape, 7708 South Africa.

Moneta Markets is a trading name of Moneta Markets Ltd, registered under Saint Lucia Registry of International Business Companies with registration number 2023-00068.

Moneta Markets Trading Limited is regulated by the Financial Services Commission (FSC) of Mauritius, with Company No. 211285 GBC and License No. GB24203391. Its registered office is located at Suite 201, 2nd Floor, The Catalyst, 40 Silicon Avenue, Ebene Cybercity, Mauritius.

Mmonexia Ltd registered in the Republic of Cyprus with registration number HE436544 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus.