Australian Dollar climbs as improving US-Iran ceasefire hopes pressure US Dollar

• AUD/USD rises amid optimism over a potential US-Iran ceasefire extension, weighing on the US Dollar and boosting risk sentiment.
• Rumors persist that Washington and Tehran have largely agreed to a 60-day ceasefire extension to reopen the Strait of Hormuz.
• US Core PCE held steady at 3.3% YoY in April, highlighting persistent inflation pressure.

The AUD/USD pair advances toward the 0.7180 region on Friday as the United States (US) Dollar (USD) remains under pressure amid improving market sentiment linked to renewed hopes for a longer-lasting ceasefire agreement between the US and Iran.

Investor sentiment improved after US media reports indicated 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.

The latest Core Personal Consumption Expenditures (PCE) Price Index remained at 3.3% YoY in April, as expected, amid the Middle East conflict, which continued to fuel inflationary pressures.

However, US President Donald Trump has yet to formally approve the agreement, while Iranian officials stated that the memorandum is not finalized. Adding to market caution, Iran’s top negotiator Mohammad Baqer Qalibaf said on Friday that Tehran does not trust guarantees or verbal commitments, stressing that “only actions are the measures” and that no action would be taken before the other side acts.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7181. The pair holds a modest bullish bias as it trades just above the 100-period Simple Moving Average (SMA) at 0.7179 and the 20-period SMA at 0.7150, suggesting a constructive underlying trend. Momentum backs this stance, with the Relative Strength Index (RSI) near 61, indicating positive but not overstretched buying pressure as price grinds higher from recent lows.

On the topside, immediate resistance is located at the horizontal barrier near 0.7190, where recent supply has capped further gains. On the downside, initial support emerges at the nearby 0.7180 level, reinforced by the 100-period SMA around 0.7179, while deeper cushions align at 0.7167 and 0.7160; a break below these latter supports would weaken the current upward bias and expose a broader corrective phase.

(The technical analysis of this story was written with the help of an AI tool.)