The AUD/USD currency pair rose approximately 0.4% on Tuesday, rebounding from early session lows near 0.6900 to trade close to 0.6950, and briefly touching the 0.6980 level, its highest in over a week. This upward movement was driven by optimism surrounding a potential ceasefire, which improved risk sentiment across markets and erased the previous session's modest decline. The price also moved above a key moving average on the daily chart, signaling a shift in technical momentum [1].
Australian economic data presented a mixed picture. The S&P Global Composite PMI for March fell to 46.6 from 47, and the Services PMI dropped to 46.3 from 46.6, indicating continued contraction in private sector output. However, the TD-MI Inflation Gauge surged 1.3% month-on-month in March after a 0.2% decline in February, with the annual rate rising to 4.3% from 3.6%. This elevated inflation reading has reinforced expectations that the Reserve Bank of Australia (RBA) may consider another rate hike at its May meeting, with markets pricing in a potential move toward 4.35% or higher. Meanwhile, ANZ Job Advertisements fell 3.1% in March, signaling softness in the labor market that could temper hawkish expectations [1].
On the US side, February Durable Goods Orders declined 1.4%, missing the consensus forecast of a 0.5% drop, though the ex-transportation figure was stronger at 0.8%. The ADP Employment Change four-week average increased to 26K from 10K. Federal Reserve speakers offered mixed signals, with Governor Williams remaining neutral and Governor Goolsbee leaning hawkish. Markets are closely watching Wednesday's 8 pm ET deadline set by President Trump for Iran to agree to a deal and reopen the Strait of Hormuz, with Pakistan's Prime Minister proposing a two-week ceasefire window and a White House response expected [1].
A successful agreement or credible extension of the deadline could further weigh on crude oil prices and ease global inflationary pressures, which would benefit risk-sensitive currencies like the Australian Dollar. Additionally, the Federal Open Market Committee (FOMC) Minutes and speeches from Fed officials Daly and Waller are scheduled for Wednesday, which could provide further direction for the US Dollar and broader markets [1].
Technical analysis shows AUD/USD trading at 0.6976, with a mildly bullish near-term bias as the pair holds above the rising 200-period exponential moving average near 0.6927. Stochastic RSI remains elevated, indicating persistent upside momentum and suggesting that dips are likely to attract buyers while the pair stays above its intraday trend base. Initial support is at 0.6955, with resistance at 0.6980 and a potential move toward the 0.7000 psychological level if resistance is broken [1].
CONCLUSION
AUD/USD has gained on ceasefire optimism and improved risk appetite, despite mixed economic signals from Australia and the US. Elevated inflation in Australia has increased expectations for a potential RBA rate hike, while upcoming geopolitical and Fed events could further influence market direction. The technical outlook remains bullish, with buyers likely to support dips above key moving averages.