AUD/USD turns south, trades below 0.7100

• Australian Consumer Inflation Expectations rose to their highest since July 2023.
• The Iran war fueled concerns about energy supply disruption, pushing Oil prices up.
• AUD/USD trimmed half of its weekly gains and aims to extend its slide.

The AUD/USD turned lower on Thursday, retreating from the multi-year peak of 0.7186 achieved on Wednesday. The Greenback hedged sharply higher as the Middle East war intensified, pushing Oil prices up and fuelling demand for the safe-haven US Dollar (USD). As the American session comes to an end, AUD/USD trades in the 0.7070 price zone.

Oil prices soared on headlines indicating the Strait of Hormuz remains closed, while attacks in the Persian Gulf kept spreading. Crude maintained the upward pressure throughout the day, with West Texas Intermediate (WTI) crude trading at $95 per barrel, and Brent surpassing the $100 mark.

Earlier in the day, Australia reported that Consumer Inflation Expectations rose in March to 5.2%, its highest since July 2023 from 5% in February, according ot the Melbourne Institute survey. At this point, it is worth remembering that the Reserve Bank of Australia (RBA) took the lead and hiked interest rates by 25 basis points, leaving the Official Cash Rate (OCR) at 3.85% when it met in early February. The energy crisis fuels speculation that the RBA, alongside most major central banks, will have no choice but to follow the hiking path.

Australia will not publish relevant macroeconomic data on Friday, but the United States (US) will release the January Personal Consumption Expenditures (PCE) Price Index, Durable Goods Orders for the same month, and the preliminary estimate of the March Michigan Consumer Sentiment Index.

Technical Analysis:

In the 4-hour chart, AUD/USD trades with a mildly bearish bias as the pair retreats from its recent high above 0.7180 and slips back toward the clustered moving averages. Price has moved beneath the rising 20-period Simple Moving Average (SMA) near 0.7120 and now pressures a flat 100-period SMA around 0.7075, while still holding above the gently advancing 200-period SMA close to 0.7050, outlining a loss of upside momentum rather than a full trend reversal. The 14-period Relative Strength Index (RSI) indicator has dropped from over 60 to the mid-40s, and the Momentum indicator has turned negative, together suggesting that sellers exert short-term control after an exhausted upswing.

In the 1-hour chart, the risk for AUD/USD also skews to the downside, as the pair holds below the 20-period and 100-period SMAs, while barely holding above a directionless Si 200-period SMA clustered at 0.7068. The Momentum indicator ticked higher but remains well below its midline, while the RSI stabilized around 30, not enough to consider downward exhaustion.

Initial resistance appears at the 0.7115–0.7120 region, where the near-term 20-period SMA converges with recent intraday highs, and a recovery above this area would open the way toward 0.7150 as the next upside barrier. On the downside, immediate support is located at 0.7075, with a deeper floor at 0.7000 threshold.

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