• AUD/USD attracts fresh buyers on Thursday as the US-Iran peace deal undermines the USD.
• The hawkish RBA further benefits the Aussie, while Fed rate hike bets could limit USD losses.
• The bearish technical setup warrants caution before positioning for any further appreciation.

The AUD/USD pair regains positive traction during the Asian session on Thursday, reversing part of the previous day's slide to sub-0.7000 levels, or the weekly low. Spot prices currently trade around the 0.7040 region, up nearly 0.40% for the day, amid a broadly weaker US Dollar (USD).

The USD Index (DXY), which tracks the Greenback against a basket of currencies, retreats from its highest level since late March amid the latest optimism over the US-Iran deal to end the war and reopen the Strait of Hormuz. Moreover, the Reserve Bank of Australia's (RBA) hawkish signal that further rate hikes are possible if inflation remains stubbornly elevated supports the Australian Dollar (AUD) and the AUD/USD pair. However, rising bets for an interest rate hike by the US Federal Reserve (Fed) in December might hold back the USD bears from placing aggressive bets and cap the currency pair.

From a technical perspective, this week's repeated failures near the 100-day Simple Moving Average (SMA) support breakpoint favor bearish traders. Moreover, the AUD/USD pair holds below the 50% retracement of the March-May upswing, suggesting that rallies are more likely to be sold into while spot prices remain capped beneath these overhead levels. This negative outlook is further reinforced by bearish momentum indicators. In fact, the Relative Strength Index (RSI) is near 42, and a slightly negative Moving Average Convergence Divergence (MACD) reading hints at waning upside momentum.

On the topside, immediate resistance emerges at the 50% retracement around 0.7054, followed by the 100-day SMA near 0.7085 and the 38.2% Fibonacci retracement at 0.7106, with a stronger barrier further up at the 23.6% level around 0.7171. On the downside, initial support is defined by the 61.8% Fibo. level at 0.7002, with deeper cushions at the 78.6% level around 0.6928 and the prior swing low near 0.6834, where buyers would be expected to show more interest if the decline extends.

AUD/USD daily chart

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