AUD/USD hesitates beneath 0.7100 as optimism over ceasefire diminishes

AUD/USD Retreats After Brief Surge

The AUD/USD currency pair relinquished some of its earlier gains from Wednesday’s strong rally, settling near 0.7050 after climbing more than 1% earlier in the day. The pair briefly touched a three-week peak around 0.7085 following reports of a temporary two-week ceasefire between the US and Iran. However, enthusiasm quickly waned as traders questioned the stability of the agreement, causing the price to retreat and consolidate in a narrow range as Asian markets prepared to open.

Market Reaction to Ceasefire Developments

The initial announcement, which included Iran’s commitment to reopen the Strait of Hormuz, triggered a sharp decline in demand for the US Dollar and boosted risk-oriented currencies. Yet, doubts soon emerged regarding the ceasefire’s longevity, as neither party has formally endorsed the proposed 10-point plan. Many market participants now view the two-week truce as a temporary pause rather than a lasting solution. Meanwhile, Australia’s domestic economic calendar remains quiet for the rest of the week. The Reserve Bank of Australia (RBA) recently raised its cash rate by 25 basis points to 4.10% in March, and speculation continues about further rate hikes in May, especially as high energy prices sustain inflationary pressures.

Upcoming US Economic Data in Focus

With no significant Australian data releases on the horizon, traders are turning their attention to key US economic indicators. Thursday will see the release of February’s core Personal Consumption Expenditures (PCE) Price Index and fourth-quarter Gross Domestic Product (GDP) figures. On Friday, markets await March’s Consumer Price Index (CPI) data, along with the University of Michigan’s consumer sentiment and inflation expectations surveys.

AUD/USD 15-Minute Chart Overview

Technical Outlook

On the 15-minute timeframe, AUD/USD is trading at 0.7047, maintaining its position above the 200-period Exponential Moving Average (EMA) at 0.7005. This suggests a slightly bullish bias for the short term, as the price continues to find support at this key technical level. The Stochastic RSI, currently near 71, indicates solid but potentially overextended upward momentum, which could lead to a period of sideways movement or a modest pullback as long as the pair stays above the 200-EMA.

Should the pair slip, immediate support is expected at the 200-period EMA around 0.7005, where buyers may step in to defend the ongoing uptrend. Provided AUD/USD holds above this threshold, the short-term outlook remains constructive, favoring further attempts at recovery. Any pause in the rally is likely to result in consolidation rather than a significant reversal in the near term.

(This technical analysis was generated with the assistance of AI tools.)