The Australian dollar has tested the 0.7150 resistance level (the upper line of the Bollinger Bands on the D1 timeframe) for the second consecutive day, amid a broader weakening of the U.S. dollar. Despite the contradictory situation surrounding the Middle Eastern conflict, traders continue to "bet on peace," which has sustained market interest in risk assets. One beneficiary of this situation is the Aussie, which has reached a four-week high against the greenback on Wednesday.

However, the upward dynamics of AUD/USD are driven not only by geopolitics but also by divergent monetary policies between the Federal Reserve and the Reserve Bank of Australia (RBA). While the Fed is adopting a wait-and-see stance (not ruling out a rate cut by the end of this year), the RBA continues to adopt a hawkish stance, leaving open the possibility of another interest rate hike at one of the upcoming meetings.

Notably, the Australian central bank has even ignored the February slowdown in inflation. On a monthly basis, the overall CPI fell to 0% (after a 0.4% increase in January), while year-over-year it fell to 3.7% (down from 3.8%). Commenting on this report, RBA officials pointed to seasonal factors. For example, in February, there was a sharp decline in demand for airline tickets and hotels (as the school holidays ended), after which operators returned prices to their "standard" levels, removing holiday surcharges.

In other words, RBA members ignored the February "pullback" in inflation and maintained a hawkish stance. It is important to remember that following the March meeting, the decision to raise rates was tenuous—five members of the Council voted "for" while four voted "against." However, the four abstaining argued for a hawkish pause, citing uncertainty regarding the level of tension in the labor market and uncertainty about quarterly inflation dynamics (data for the first quarter will be published at the end of this month).

This is why Thursday's release is so important for AUD/USD traders, as we will receive key labor market data for March.

According to preliminary forecasts, unemployment in Australia is expected to remain unchanged at 4.3% in March. The number of employed should increase by 18,000. This is a relatively decent result, but the ratio of full-time to part-time employment will be crucial. For instance, in the previous month, the indicator's overall growth occurred solely due to part-time employment, while full-time employment decreased (the ratio was -30,500/+79,400). If the March report reflects another sharp decline in full-time employment, the Australian dollar will come under pressure, even if the overall unemployment remains low.

Conversely, if employment rises more than expected and the main driver of growth is full-time positions, AUD/USD buyers will once again find themselves "in the driver's seat," as such a result would be a key trigger for the RBA's decision on further tightening of monetary policy in the current context.

Attention should also be paid to the total number of hours worked. In February, this figure declined, a direct result of the shift in the employment structure towards part-time positions. If this downward trend continues (both in the context of the bias towards part-time work and in the context of decreased hours worked), it will indicate a reduction in the actual volume of productive labor, which could lead to a long-term slowdown in GDP growth.

However, if these components of the release fall into the "green zone," the compressed spring will unwind in the opposite direction, favoring the Australian dollar.

Thus, Thursday's report is of great importance to AUD/USD traders—especially if Middle Eastern events unfold in a de-escalatory manner. If Iran and the U.S. sit down for negotiations once more, or if the two-week ceasefire is extended, there will be sustained interest in risk assets, and macroeconomic reports will return to the forefront. In such a case, the "Australian non-farms" will play a crucial role for AUD/USD—at least in the medium-term outlook.

From a technical standpoint, the pair is on the daily chart between the middle and upper lines of the Bollinger Bands and above all lines of the Ichimoku indicator (including above the Kumo cloud). A similar pattern has formed on the 4-hour chart, with the difference being that the Ichimoku indicator here shows a bullish "Parade of Lines" signal. Any corrective downward pullbacks in the pair should be viewed as opportunities to open long positions, with the first (and currently only) target at 0.7150 (the upper Bollinger Band line on the D1 timeframe).