The currency pair remains range-bound near 0.7150 amid US-Iran ceasefire talks and mixed Fed rate hike expectations.
The AUD/USD pair traded in a narrow range during the Asian session, holding above 0.7150 after rebounding from a one-week low. Modest gains are expected for the first time in three weeks, supported by the USD’s safe-haven status due to a draft US-Iran ceasefire agreement extending the truce by 60 days.
Investor skepticism over the US-Iran deal, driven by disputes over Tehran’s nuclear program and the Strait of Hormuz, tempers optimism. US inflation rising at its fastest pace in three years in April reinforces expectations of a Federal Reserve rate hike by year-end, bolstering the USD. Meanwhile, reduced bets on a Reserve Bank of Australia rate hike in June limit the AUD’s upside.
Technically, the pair remains confined to a two-week range, with resistance near the 100-period SMA on the 4-hour chart and the 23.6% Fibonacci retracement level. The Relative Strength Index near 56 suggests mildly constructive momentum despite capped gains.