AUD/USD Forecast: Aussie Bulls Defy Geopolitical Chaos to Test 0.7200

Published: April 29, 2026

Key Points

• Diplomatic De-escalation: Reports of a Pakistani-mediated proposal from Iran to reopen the Strait of Hormuz are reducing the safe-haven demand for the US dollar, which has been strong since February.
• RBA Hawkish Anchor: With the Consumer Price Index (CPI) expected to rise to 4.7%–4.8%, the market anticipates a 74% chance of a rate hike to 4.35% on May 5, providing support for the Australian dollar (AUD).
• Technical Resilience: The AUD/USD pair remains above the rising 500 Simple Moving Average (SMA) at 0.70433, indicating a shift from consolidation to a bullish trend targeting the 0.7183/0.7200 zone.

Market Analysis

The Australian dollar is showing strength despite ongoing tensions in US-Iran negotiations. The currency is acting as a high-beta proxy for global risk, with traders anticipating a potential diplomatic breakthrough that could resolve the energy conflict.

Impact of Diplomacy on the Dollar

The primary driver for the AUD's strength is the decline in the Dollar Index (DXY), which has dropped to around 98.27 following news of Iran's proposal to the US. This shift is encouraging investors to take on more risk, benefiting the AUD/USD pair.

Reserve Bank of Australia (RBA) Expectations

The RBA is facing pressure from persistent energy-driven inflation. With the upcoming CPI report expected to show an increase, the yield advantage of Australian bonds over US bonds is attracting carry traders. The widening spread between Australian and US 10-year bonds is a positive sign for the AUD.

Technical Indicators

Using a 0.001 Renko chart, the AUD/USD maintains a bullish structure, with recent price action confirming that buyers are defending higher support levels. The current price is near 0.7152, and a recovery above 0.7175–0.7183 would reinforce bullish sentiment, while a drop below 0.71136 could signal a weakening trend.

Technical Outlook

Current Trend Direction: Bullish

Key Support Levels: 0.6833, 0.7140

Key Resistance Levels: 0.7275, 0.7405

The medium-term outlook suggests that the AUD/USD could continue its upward trajectory towards the 0.72–0.7405 range, driven by a combination of short-covering and a hawkish stance from the RBA. As long as the pivotal support at 0.7114 holds, the bullish trend is expected to persist.

Conclusion

The AUD/USD pair is positioned for potential gains as geopolitical tensions ease and the RBA signals a tightening monetary policy. Traders should monitor key support and resistance levels closely as the market reacts to upcoming economic data and diplomatic developments.