• AUD/USD recovers despite renewed tensions in the Middle East.
• Trump rejects Iran’s peace proposal, reviving concerns over Strait of Hormuz disruptions.
• Markets now focus on Tuesday’s US CPI report for clues on the Federal Reserve’s policy outlook.

AUD/USD surges toward the 0.7260 region on Monday, supported by improving demand for commodity-linked currencies despite renewed geopolitical tensions after United States (US) President Donald Trump rejected Iran’s latest peace proposal, calling it “totally unacceptable.”

The rejection of the proposal revived concerns about a prolonged conflict in the Middle East and about extended disruptions to global Oil shipping through the Strait of Hormuz. On Monday, Trump told Fox News he was considering relaunching his initiative to have US naval ships escort tankers through the Strait, a policy he curtailed last week after Iran fired warning shots. Oil prices surged following the headlines, increasing fears of renewed inflationary pressure and keeping markets cautious.

Investors are now turning their attention toward Tuesday’s United States Consumer Price Index (CPI) report, which could provide fresh signals on the inflation outlook and the Fed’s next policy steps.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7255, holding a constructive bullish bias as it clings to a nearby horizontal pivot while staying above both the 20-period Simple Moving Average (SMA) at 0.7237 and the 100-period SMA at 0.7183. The Relative Strength Index lifts toward the low-60s, suggesting firm but not overextended upside momentum as price tests a key cap just overhead.

On the topside, immediate resistance is aligned at the horizontal barrier near 0.7260, where a clear break would open room for further gains. On the downside, initial support emerges at 0.7249, followed by 0.7243, with the 20-period SMA at 0.7237 and the deeper 100-period SMA at 0.7183 reinforcing the broader bullish structure on pullbacks.

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