Australian Dollar recovers as Iran peace hopes sink Oil ahead US CPI

• AUD/USD gains 0.88% to 0.6924 as risk appetite improves.
• WTI drops nearly 4.50% amid unconfirmed US-Iran diplomatic progress.
• December Fed hike odds reach 82% ahead of US CPI.

The Aussie Dollar makes a U-turn, rises 0.88% as the US Dollar loses ground amid growing speculation that Washington and Tehran may be close of a deal, while investors brace for the release of the Consumer Price Index (CPI) data in the United States. The AUD/USD trades at 0.6924.

AUD/USD rebounds as plunging Oil prices weaken the Dollar, ahead of US CPI

Wall Street finished Monday’s session with gains, as US President Donald Trump said that it was “highly unlikely” that he would order new strikes on Iran.

Newswires, not confirmed by major outlets, read “US-Iran nuclear talks reportedly revived,” with Al Arabiya reporting that sources said that a Qatari-Pakistan proposal is the first step toward a potential resolution of the conflict. The deal reveals that the US agreed to allow uranium enrichment in Iran up to 3.67%.

The latter sent Oil prices tumbling, with West Texas Intermediate (WTI) registering losses of nearly 4.50% at $86.37.

In the US, Fed speakers were hawkish, with Richmond Fed President Thomas Barkin saying that the risks lie on the inflation side of the US central bank's dual mandate, while Chicago Fed President Austan Goolsbee reiterated that services inflation has accelerated over the past few months, complicating the argument that elevated prices are only tariff-driven.

Data revealed the New York Fed Survey of Consumer Expectations in October, with one-year inflation expectations seen at 3.9% unchanged, for three years at 3.3% and for five years, also steady at 3%.

Last week’s Nonfarm Payrolls report increased the chances that the Federal Reserve will increase rates at the December meeting, according to the CME Fed Watch Tool. The odds are at 82%, up from last Friday’s 76%.

Ahead, the US economy will see the release of the US Consumer Price Index (CPI) on Tuesday, expected to rise from 3.7% to 3.9% YoY. Core CPI is forecast to rise from 2.6% to 2.8% YoY.

In Australia, the docket is light with the release of the Westpac Consumer Confidence for November.

AUD/USD Price Forecast: Technical outlook

In the daily chart, AUD/USD trades at 0.6922, extending a pullback beneath its major simple moving averages and keeping a bearish near-term tone. The latest 50/100/200-day simple moving averages cluster around 0.7040 as a cap above spot, while price still rests on a series of rising trend-line supports initiated between 0.6673 and 0.6897, suggesting a corrective decline within a broader constructive structure. The Relative Strength Index (14) at 41.8 stays below the midline, hinting at lingering downside pressure but not yet oversold conditions.

On the topside, initial resistance is provided by the triple simple moving average cluster near 0.7040, ahead of the horizontal barrier at 0.7198, while the longer-term downward trend line originating at 0.8015 remains a distant obstacle. On the downside, nearby support is concentrated around the upward trend-line pivots at 0.6897, followed by secondary trend-line floors at 0.6865 and 0.6833, before a deeper structural base emerges from the older rising trend line starting at 0.6673.

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