AUDUSD - Iran Ceasefire, Inflation and Employment Driving PricesAustralian vs US DollarPEPPERSTONE:AUDUSDPepperstoneAUDUSD started the week with a gap open, dropping from its closing level on Friday April 10th at 0.7072 to a brief low of 0.6981 on Monday April 13th, with traders initially seeking shelter in the safe haven of the US dollar after weekend peace talks between the US-Iran failed to reach a deal. Since that low, AUDUSD prices have staged an impressive recovery posting a high of 0.7103 overnight, boosted by comments made by US President Donald Trump which seemed to indicate the US may be willing to resume talks with Iran. At the time of writing (0700 BST) prices have since settled back slightly lower around 0.7080, as FX traders seek clarity on the key issues related to the Iran conflict, namely, Will the ceasefire hold? Could peace talks resume? How could the US Blockade of the Strait of Hormuz impact FX markets? While these stories evolve, AUDUSD traders may also be assessing the importance of 2 key pieces of economic data, the first from the US, which could impact the general direction of the US dollar (USD), and the second from Australia, which may have a more direct impact on the Australian dollar (AUD) side of this popular currency pair. US PPI is due later today at 1330. This is factory gate inflation and could ultimately impact consumer inflation (CPI), if businesses decide to pass on the higher prices they are paying, rather than let it eat into their margins and long-term profits. Historically PPI is a volatile reading and the immediate focus for traders maybe on whether there has been any surprise surge above expectations due to the jump in global energy prices. This could be important as it may force the Federal Reserve to take interest rate cuts off the table in the near term or even shift to a more hawkish bias. The second release is the Australian employment report due at 0230 BST on Thursday. The outcome of this reading could take on more significance after consumer and business sentiment in the country slumped overnight driven by concerns around higher interest rates and the recent spike in fuel prices. RBA policymakers will use this employment report, alongside recent inflation readings and the situation in the Middle East to determine their next move on interest rates when they meet next on May 5th. So, any surprise deviation away from market expectations could have an outsized impact on the direction of AUDUSD into the weekend. Technical Update: Opening Gap Lower Finds Support: Geopolitical developments in the Middle East over the weekend initially triggered negative AUD, positive USD flows, which led AUDUSD to open the new week with a downside gap from Friday’s closing level. However, the decline found support at the rising Bollinger mid‑average, currently at 0.6981, potentially highlighting this level as the near‑term support focus. This 0.6981 level not only halted the initial decline but also helped establish a recovery, reinforcing 0.6981 as a key support focus. However, FX traders may also be attempting to map out potentially relevant support and resistance levels to gauge where the next directional move in AUDUSD may emerge. Potential Support Levels: The Bollinger mid‑average at 0.6981 remains the first potential support, and its importance could be reinforced by the rally that followed Monday’s lower open. Therefore, a closing break below 0.6981 could lead to further downside pressure, shifting the focus toward lower supports. If the 0.6981 level gives way, the risks may extend toward 0.6833, which is the March 30th low, and potentially 0.6803, which marks the 50% retracement of the November 21st to March 11th advance. Potential Resistance Levels: While 0.6981 continues to provide support for AUDUSD on a closing basis, attention may shift to near‑term resistance at 0.7124, which is the March 18th high. A daily close above 0.7124 may now be needed to tilt risks back toward renewed upside momentum. While not an outright positive signal, a daily close above 0.7124 could indicate building upside pressure, opening scope for a move toward 0.7188, the March 11th failure high. A break above 0.7188 may lead to a strengthening of the upside bias and could signal improving upside momentum. The material provided here has not been prepared accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients. 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