The AUD/USD rate fell on Thursday, moving away from a multi-year high of 0.7186 reached on Wednesday. The dollar hedged sharply higher as war in the Middle East intensified, pushing up oil prices and fueling demand for the safe-haven U.S. dollar (USD). As the US session comes to an end, AUD/USD is trading in the 0.7070 price zone.
Oil prices have surged in headlines, indicating that the Strait of Hormuz remains closed while attacks in the Persian Gulf continue to spread. Crude oil maintained upward pressure throughout the day, with West Texas Intermediate (WTI) crude trading at $95 a barrel and Brent crude above the $100 mark.
Earlier in the day, Australia said consumer inflation expectations rose to 5.2% in March, the highest since July 2023, from 5% in February, a Melbourne Institute survey showed. It is worth recalling here that the Reserve Bank of Australia (RBA) took the lead and raised interest rates by 25 basis points, leaving the official cash rate (OCR) at 3.85% at its meeting in early February. The energy crisis is fueling speculation that the RBA, like most major central banks, will have no choice but to continue on an upward path.
Australia will not release relevant macroeconomic data on Friday, but the United States (US) will release the January personal consumption expenditure (PCE) price index, robust goods orders for the same month and flash estimates for the March Michigan consumer sentiment index.
Technical analysis:
On the 4-hour chart, AUD/USD is trading with a slightly bearish bias as the pair retreats from the recent high above 0.7180 and returns towards the clustered moving averages. The price has moved below the rising 20-period plain moving average (SMA) near 0.7120 and is currently exerting a flat 100-period SMA near 0.7075, while holding above the gently rising 200-period SMA near 0.7050, indicating a loss of upside momentum rather than a complete trend reversal. The 14-period Relative Strength Index (RSI) dropped from over 60 to the mid-40s and the Momentum Index turned negative, which collectively suggests that sellers are exercising short-term control after the rally has dried up.
On the 1-hour chart, the risk for AUD/USD is also shifting lower as the pair holds below the 20- and 100-period SMAs, barely holding above the non-directional Si 200-period SMA centered at 0.7068. The Momentum indicator has risen but remains well below the midline, while the RSI has stabilized around 30, which is not high enough to call it a downside exhaustion.
Initial resistance appears at the 0.7115-0.7120 area where the short-term 20-period SMA coincides with recent intraday highs, and a rebound above this area will open the way towards 0.7150 as the next upside barrier. On the other hand, immediate support is located at 0.7075, with a deeper lower threshold at 0.7000.
(The technical analysis for this story was written with the facilitate of an AI tool.)
