Australian Dollar rebounds ahead of US CPI as Iran peace hopes drive Oil lower

• 0.88% advance takes AUD/USD to 0.6924 as risk sentiment strengthens.
• Nearly 4.50% fall in WTI follows unverified reports of US-Iran diplomatic progress.
• 82% probability of a December Fed rate rise precedes US CPI release.

0.88% is the Australian Dollar’s gain as it reverses direction. The US Dollar retreats on mounting speculation that Washington and Tehran may be nearing an agreement. Investors are also preparing for the United States Consumer Price Index (CPI) release, with AUD/USD trading at 0.6924.

AUD/USD recovers ahead of US CPI as Oil slump weighs on Dollar

US President Donald Trump described the prospect of ordering fresh strikes on Iran as “highly unlikely”. Wall Street closed higher on Monday.

“US-Iran nuclear talks reportedly revived,” read newswire reports that major outlets had not confirmed. Separately, Al Arabiya cited sources saying a Qatari-Pakistan proposal represented the first step towards a possible resolution of the conflict. Under the deal, the US agreed to permit uranium enrichment in Iran up to 3.67%.

Oil sold off following that development. West Texas Intermediate (WTI) fell nearly 4.50% to $86.37.

Hawkish comments came from Fed officials in the US. Richmond Fed President Thomas Barkin placed the risks on the inflation side of the US central bank’s dual mandate. Chicago Fed President Austan Goolsbee again noted that services inflation had picked up over the past few months, making it harder to argue that tariffs alone were responsible for elevated prices.

October’s New York Fed Survey of Consumer Expectations put one-year inflation expectations at an unchanged 3.9%. Expectations over three years stood at 3.3%, while the five-year measure also held steady at 3%.

Following last week’s Nonfarm Payrolls report, the probability of a Federal Reserve rate increase at its December meeting rose to 82%, according to the CME Fed Watch Tool. That compares with 76% last Friday.

Tuesday brings the US Consumer Price Index (CPI) release. The annual headline rate is expected to climb to 3.9% from 3.7%, while the forecast for core CPI is an increase to 2.8% from 2.6% YoY.

Australia’s economic calendar is sparse, with November’s Westpac Consumer Confidence release due.

AUD/USD Price Forecast: Technical Levels

0.6922 is the daily chart’s AUD/USD reading. The pair continues to retreat below its major simple moving averages, leaving the near-term bias bearish. Overhead, the latest 50/100/200-day simple moving averages converge around 0.7040 and constrain the price. Yet a series of rising trend-line supports originating between 0.6673 and 0.6897 still underpins the pair, pointing to a corrective fall within a broadly constructive structure. At 41.8, the Relative Strength Index (14) remains below its midpoint. This signals persistent downward pressure, though conditions are not yet oversold.

The three simple moving averages near 0.7040 form the first resistance zone, followed by the horizontal level at 0.7198. Further away, the longer-term falling trend line originating at 0.8015 remains an obstacle. Immediate support centres on the rising trend-line pivots at 0.6897. Below that sit secondary trend-line supports at 0.6865 and 0.6833, with a deeper structural floor provided by the older rising trend line beginning at 0.6673.

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