The AUD/USD currency pair remained muted on Friday, posting a slight decline of 0.10% after four consecutive days of gains, and traded near 0.7076 at the time of writing. Despite the day's cautious tone, the pair is set to end the week with gains of over 2.50% [1]. The core event driving market sentiment was the release of the United States March Consumer Price Index (CPI) report, which showed firm inflation. The CPI rose 0.9% in March, a sharp acceleration from 0.3% in the previous month, while annual inflation increased to 3.3% year-over-year from 2.4% in February [1]. This surge was largely attributed to rising energy prices amid ongoing Middle East tensions [1].
Despite the strong inflation data, the US Dollar remained under pressure, influenced by heightened geopolitical risks around the Strait of Hormuz and uncertainty in the Middle East. US and Iran officials are expected to begin peace talks in Pakistan this weekend, adding another layer of uncertainty to the market [1].
Technical analysis indicates that AUD/USD maintains a constructive bullish bias, trading above both the 20-period and 100-period simple moving averages (SMAs) at 0.7044 and 0.6959, respectively. The Relative Strength Index (14) is around 66, suggesting firm upside momentum without signaling extreme overbought conditions. Immediate resistance is at 0.7093, with initial support at 0.7072, followed by 0.7070 and 0.7054. The 20-period SMA at 0.7044 and the 100-period SMA near 0.6959 provide additional support levels [1].
CONCLUSION
The AUD/USD pair has shown resilience despite hotter-than-expected US inflation and ongoing geopolitical tensions, ending the week with notable gains. While the US Dollar remains under pressure, technical indicators suggest continued bullish momentum for AUD/USD. Market participants will be closely watching upcoming peace talks and further inflation data for direction.