The AUD/USD exchange rate is experiencing a bullish trend, with the pair currently trading at 0.7085, up 3.30% from its July low of 0.6868. This upward momentum is fueled by a risk-on sentiment in the market, following the temporary pause in tensions between the US and Iran. Additionally, positive macro data from the US, including a slight drop in producer and consumer inflation, has contributed to this positive sentiment. The Federal Reserve's decision to leave interest rates unchanged this year is also expected to keep the spread between the US and Australia stable, further supporting the AUD/USD's bullish trajectory. However, the market's focus will shift to the upcoming US building permits and housing starts data, as well as the Federal Reserve's minutes of the last meeting, which could provide valuable insights into the central bank's future actions. In terms of technical analysis, the AUD/USD pair has already crossed above the 50-day moving average, with the Relative Strength Index (RSI) indicating a strong upward momentum. The next key target is 0.7185, which was last reached on March 11. A drop below the 50-day moving average at 0.7020 would invalidate the bullish outlook. This analysis suggests that the AUD/USD pair is likely to continue its upward trend, but market participants should remain vigilant and consider the potential risks associated with the US-Iran tensions and the Federal Reserve's monetary policy decisions.
