The AUD/USD currency pair remained confined within a narrow trading range around 0.7175 during the European session on Monday, reflecting ongoing market indecision. This consolidation comes as uncertainty grows regarding the outcome of US-Iran negotiations for a permanent peace deal. Market participants have adopted a cautious stance following amendments to the potential deal by US President Donald Trump, who stated in a Fox News interview that he does not want Iran to develop or purchase nuclear weapons, and emphasized that negotiations are ongoing with no rush for a resolution [1].
Geopolitical tensions have further intensified due to recent exchanges of attacks between Israel and Lebanon, which have raised doubts about the likelihood of an early agreement. Iran’s Parliament Speaker Mohammad Bagher Ghalibaf warned on social media that US naval blockades on Iranian ports and Israeli attacks on Lebanon demonstrate US noncompliance with the ceasefire [1].
On the domestic front, investors are awaiting the release of Australia’s Q1 Gross Domestic Product (GDP) data, scheduled for Wednesday. The consensus expectation is for GDP growth to slow to 0.5% quarter-on-quarter, down from the previous reading of 0.8% [1]. A lower GDP figure is generally considered bearish for the Australian Dollar (AUD) [1].
Technically, the AUD/USD pair has been consolidating for over two weeks in a tight range between 0.7080 and 0.7200. The 20-day exponential moving average (EMA) is flat at 0.7167, and the Relative Strength Index (RSI) is near a neutral 52, both indicating a lack of clear direction and a contraction in volatility. Immediate support is seen at 0.7150, with a break below potentially exposing the May 19 low at 0.7080. On the upside, a move above the May 29 high at 0.7200 could open the way to the four-year high at 0.7277 [1].
CONCLUSION
The AUD/USD pair is currently trading sideways as markets await clarity on both geopolitical developments and key Australian economic data. The anticipated slowdown in GDP growth and ongoing US-Iran negotiations are contributing to investor caution, resulting in limited price movement and subdued volatility.