AUD/USD Price Forecast: Aussie Paradox Peaks as Diplomacy Thaw Fuels 0.7200 Breakout

Author: Cedric Thompson

Published: April 18, 2026

Key Points

• Reports of President Trump's potential trip to Islamabad for a US–Iran peace deal have reduced the war premium on the US dollar, pushing AUD/USD to nearly four-year highs.
• Despite a drop in Westpac Consumer Sentiment to 80.1, the Australian dollar (AUD) remains attractive due to expected interest rate hikes from the Reserve Bank of Australia (RBA).
• China's Q1 GDP growth of 5.0% has revitalized the commodity proxy trade, supporting the AUD despite domestic economic challenges.

Market Analysis

The AUD/USD pair is showing resilience in the face of local economic difficulties, such as rising fuel prices. Investors are focusing on the yield spread, as the RBA is expected to adopt a hawkish stance, while US jobless claims remain stable. This has led to a significant short-covering rally, with the dollar index retreating to pre-war levels.

Weekly Structure

The macroeconomic outlook for AUD/USD appears strong, having successfully navigated a fundamental stress test. The pair is holding above the long-term Supertrend support level at 0.67258 and is targeting the 0.7300 resistance level next.

Daily Performance

The daily chart indicates a V-shaped recovery from a structural pivot at 0.6833, with the price moving above the 21-EMA and breaking past the 0.71875 resistance. The Relative Strength Index (RSI) is approaching 70, indicating bullish momentum without being overbought.

Renko Chart Analysis

On the Renko chart, the price has shown a consistent series of green bricks, indicating strong buying pressure. The price has broken above the 500 Simple Moving Average (SMA), which had previously capped rallies since late March. Although there is some bearish divergence on the Z-Score SMA, the overall trend remains upward.

Conclusion

Current Trend Direction: Bullish

Bias: Positive

Key Support Levels: 0.6725, 0.6833

Key Resistance Level: 0.73

The medium-term outlook for AUD/USD is positive, with expectations of reaching the 0.7300 ceiling driven by diplomatic developments. The upcoming RBA meeting on May 5th, where a potential 25 basis point hike is anticipated, could provide the necessary momentum to breach this resistance level.