AUD/USD Price Forecast: Diplomacy Drains Dollar as Aussie Bulls Eye 0.7200

Published: April 28, 2026

Key Points

• Geopolitical 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 had been elevated since February.
• Dollar Index (DXY) Movement: The DXY has decreased to 98.27, marking a seven-day decline that benefits risk-sensitive assets like the Australian dollar (AUD).
• Shift in Bullish Targets: With reduced geopolitical risks, technical buyers are focusing on the 0.7180/0.7200 resistance zone for AUD/USD.

Market Analysis

Traders are moving away from the US dollar as diplomatic efforts to resolve tensions in the Strait of Hormuz gain traction. The DXY's decline indicates a retreat from the war premium that had supported the dollar. Despite crude oil prices remaining high, the currency market is anticipating a diplomatic resolution, benefiting the AUD as a high-beta asset.

RBA Tightening Expectations

The Reserve Bank of Australia (RBA) faces pressure from persistent energy-driven inflation, with expectations of a CPI report showing a rise to 4.7%. Market futures indicate a 74% probability of a rate hike to 4.35% on May 5, which supports the Australian dollar's strength.

Weekly Breakout Analysis

The weekly chart shows a bullish breakout from a long-term base, with buyers defending the breakout zone. As long as the AUD/USD remains above 0.7000, the trend is expected to continue towards 0.7280.

Daily Momentum Indicators

The daily chart indicates a V-shaped recovery from a minor swing low, with the market absorbing geopolitical concerns and pushing higher. The RSI is approaching 60, suggesting further upward potential.

Renko Brick Analysis

Renko charts show a series of green continuation bricks, indicating strong bullish momentum. The market remains structurally intact as long as it holds above 0.7090, suggesting that short pullbacks are merely liquidity grabs.

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Key Support Levels: 0.6833, 0.7014

Key Resistance Levels: 0.7200, 0.7300

The AUD/USD is expected to maintain its upward trajectory towards the 0.72–0.7300 zone, driven by short-covering and a hawkish RBA, provided that the pivotal support at 0.7090 holds against profit-taking.