The Australian Dollar (AUD) advanced against the US Dollar (USD) on Friday, with the AUD/USD pair moving toward the 0.7180 region. This upward movement was attributed to improving market sentiment following US media reports that Washington and Tehran had reached a memorandum of understanding to extend the ceasefire by 60 days, reopen the Strait of Hormuz, and initiate nuclear negotiations [1].
Despite these positive developments, the agreement has not been formally approved by US President Donald Trump, and Iranian officials have stated that the memorandum is not finalized. Iran’s top negotiator, Mohammad Baqer Qalibaf, emphasized that Tehran does not trust guarantees or verbal commitments, stating, 'only actions are the measures' and that no action would be taken before the other side acts [1].
On the economic front, the latest Core Personal Consumption Expenditures (PCE) Price Index remained at 3.3% year-over-year in April, as expected. The ongoing Middle East conflict continued to fuel inflationary pressures [1].
From a technical perspective, AUD/USD traded at 0.7181, maintaining a modest bullish bias as it stayed above the 100-period Simple Moving Average (SMA) at 0.7179 and the 20-period SMA at 0.7150. The Relative Strength Index (RSI) was near 61, indicating positive but not overstretched buying pressure. Immediate resistance was noted at 0.7190, with support at 0.7180, 0.7167, and 0.7160. A break below these supports could weaken the current upward bias and lead to a broader corrective phase [1].
CONCLUSION
The Australian Dollar's rise was driven by renewed hopes for a US-Iran ceasefire, which pressured the US Dollar. However, the lack of formal approval and lingering caution from Iranian officials suggest that market sentiment remains tentative. Technical indicators point to a constructive trend for AUD/USD, but further gains depend on concrete developments in US-Iran relations.