AUD/USD Forecast: CPI Miss Gives Bulls Breathing Room Before Powell’s Test

Published: April 30, 2026

Key Points

• AUD/USD remains bullish, holding above the 500-SMA.
• Australia’s CPI rose to 4.6% YoY, below the 4.8% forecast, easing concerns over aggressive RBA actions.
• The upcoming Fed decision and Powell’s press conference are critical catalysts for market movement.

Australia's CPI Analysis

The Consumer Price Index (CPI) in Australia increased to 4.6% in April from 3.7%, which was below the anticipated 4.8%. This softer-than-expected inflation figure alleviates fears of an aggressive response from the Reserve Bank of Australia (RBA), although inflation risks remain significant. Key areas contributing to inflation include housing, transport, food, and household services, with transport costs being particularly influenced by the ongoing Iran conflict and rising oil prices.

Market Dynamics

The U.S. dollar has gained traction as a safe-haven asset ahead of the Fed's decision, with traders keenly observing Powell's comments on inflation and the economic implications of the Iran war. The price of oil, fluctuating between $100 and $110, continues to support the stagflation narrative, which can bolster the dollar temporarily.

Additionally, the upcoming earnings reports from major U.S. tech companies like Microsoft, Amazon, and Meta will significantly influence market sentiment. The AUD/USD pair has been behaving more like a high-beta risk asset rather than a straightforward interest rate differential trade. Positive guidance from these tech firms could enhance risk appetite and support the Australian dollar, while negative guidance could have the opposite effect.

Technical Analysis

The Renko chart, utilizing a 0.001 brick size, indicates a constructive outlook for AUD/USD. The price is currently consolidating around 0.7150 after a recent high of 0.7221, maintaining its bullish structure. The short-term Supertrend has shown some volatility, with resistance levels identified between 0.7160 and 0.7183, while support is found near 0.7143 and 0.7114. The broader trend remains positive as long as the price stays above the 500-SMA.

Momentum indicators suggest a cooling off, with the RSI below 50 but approaching it, indicating that the previous rally is not overheated. The market appears to be in a consolidation phase, awaiting a catalyst for the next move.

AUD/USD Outlook

Current Trend Direction: Bullish

Bias: Positive

Key Support Levels: 0.6833, 0.7014

Key Resistance Levels: 0.7275, 0.74075

The medium-term outlook for AUD/USD suggests a potential upward movement towards 0.7221 and possibly 0.7300, provided that buyers defend the support level at 0.7114 and the Renko structure remains intact. A decisive break above 0.7185 could trigger further upside momentum. Conversely, if Powell adopts a hawkish tone and the dollar strengthens, the pair may retest the 0.7114 support level, although the bullish bias would remain as long as this level holds.

Author Information

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