AUD/USD Price Forecast: Aussie Bulls Defy Geopolitical Limbo as RBA Hike Bets Intensify

Published: April 23, 2026

Key Points

• The collapse of peace talks in Islamabad has not deterred AUD bulls, with iFlow data indicating increased institutional interest in the Australian dollar as a high-yielding energy proxy.
• Despite a decline in the Westpac Leading Index to -0.13%, the Reserve Bank of Australia's (RBA) Deputy Governor Hauser's focus on inflation has led markets to price in a 77% chance of a rate hike in May.
• AUD/USD is consolidating around 0.7150, maintaining a long-term bullish structure characterized by a series of higher swing lows since early April.

Market Analysis

The geopolitical landscape is currently unstable, with significant events such as Vice President JD Vance canceling his trip to Islamabad and Iran's refusal to engage in talks. This chaos typically drives investors towards the US dollar; however, in 2026, the Australian dollar is emerging as a potential safe-haven asset due to its strong export profile, particularly in the context of rising oil prices.

BNY's iFlow data shows that institutional interest in the AUD has surged as traders seek to capitalize on the favorable terms of trade resulting from the Middle East conflict. The Australian dollar is currently navigating a "geopolitical limbo," yet it remains resilient.

RBA's Stance

The Australian economy is sending mixed signals, with the Westpac-Melbourne Institute Leading Index falling below trend for the first time since August 2025. Despite this, RBA Deputy Governor Andrew Hauser has reaffirmed the bank's commitment to controlling inflation, suggesting that growth concerns are secondary. Consequently, the probability of a rate hike next month has increased significantly.

Technical Analysis

On the 0.001-brick Renko chart, the market is not showing signs of rolling over but rather taking a breather. The price is holding above the rising long-term moving average, and the sequence of higher swing lows remains intact. The Relative Strength Index (RSI) cooling to 49 is viewed positively, indicating that the market is normalizing after a previous impulse move.

Support and Resistance Levels

Key levels to watch include:

• Resistance: 0.7180 (a clean break above this level is needed for a continuation towards 0.7220)
• Support: 0.7148 and 0.7134 (primary support levels), with deeper trend support at 0.7033.

Conclusion

The current trend for AUD/USD is bullish, with a positive bias. If the support zone at 0.7115 holds, the pair is expected to maintain its upward trajectory towards the 0.7225 highs. The combination of a hawkish RBA and Australia's role as an energy proxy should help offset the impact of softening domestic growth data. However, any unexpected actions from the Warsh-led Fed could introduce volatility.

Author: Cedric Thompson, CMT, CFA, an investment strategist with expertise in asset management and multi-asset investing.