FxWirePro: AUD/USD drifts lower as recovery rally loses momentum

• AUD/USD  eased on Thursday as investors assessed the impact  of the ongoing Middle East conflict.

• Prospects of US–Iran negotiations supported hopes of easing conflict risks and reopening oil routes, yet the outlook remains uncertain.

• The United States is attempting to contain rising energy supply concerns as tensions with Iran continue to escalate, which could influence global commodity and currency markets.

•  Meanwhile, Australian household spending rose only a modest 0.3% in January, after a 0.5% drop the month before, suggesting consumer demand had lost some momentum.

• Annual growth accelerated to 2.6%, the fastest pace since early 2023 when post-pandemic stimulus was still being felt.

• Markets imply only a 20% chance the RBA will hike its 3.85% cash rate at the next board meeting on March 17, but are fully priced for a move to 4.10% in May.

•  Immediate resistance is located at 0.7076(SMA 20), any close above will push the pair towards 0.7137 (23.6%fib).

•  Support is seen at 0.7034 (38.2%fib) and break below could take the pair towards 0.7017(50%fib)

Recommendation: Good to buy around 0.7020 with stop loss of 0.6950, and target price of 0.7100