ASX 200 Forecast: Seven-Day Slide Keeps 8,600 in Focus as RBA Risk Builds

Inflation Relief Wasn’t Enough

The ASX 200 got a softer-than-feared core inflation print. It helped. Briefly.

But not enough.

The index still closed lower, its seventh straight down session. That’s the longest losing streak since mid-2022, and the chart doesn’t look like a market that has suddenly rediscovered confidence. It looks tired. Distribution remains the cleaner read.

The headline inflation number did some damage. Australia’s CPI jumped to 4.6%, up sharply from 3.7%, with fuel and energy costs still feeding through from the Iran-war shock. The softer trimmed-mean figure cooled the immediate fear of a May rate hike, with market pricing reportedly easing to roughly 71%–72% from the mid-80s. That’s a relief trade. Not a bullish reversal.

Australia CPI jumps to 4.6% as inflation pressure returns

Bar chart showing Australia’s CPI rising to 4.6% in April 2026, below the 4.8% forecast but above the prior 3.7% reading

Source: TradingView

Sector Split Tells the Story

The market is still fighting a two-speed tape. Energy caught a bid as oil-linked names benefited from the same inflation impulse that’s hurting broader sentiment. Woodside helped that theme after reporting stronger first-quarter revenue, while the energy sector finished higher.

Banks didn’t get the memo. Financials fell, with the rate-sensitive parts of the market still exposed to the possibility that the RBA stays hawkish into the second half. Healthcare also struggled, dragged by CSL weakness. That matters because the ASX 200 can’t build a clean recovery if banks and healthcare are leaking at the same time.

Codan was the outlier, surging after a guidance upgrade. Nice move. But one stock doesn’t fix a broken index tape.

RBA Meeting Becomes the Next Trap Door

The next major catalyst is the RBA’s May 5 policy decision. Traders reduced hike expectations after the core inflation miss, but the central bank still faces a nasty mix with high headline inflation, oil-driven cost pressure, sticky services risk, and a stretched equity market with limited valuation cushion.

That’s the problem for ASX bulls. The market may be due for a short-covering bounce, but the macro backdrop still argues for caution. A hawkish RBA tone could turn any rebound into another selling opportunity.

Renko Chart: Bears Still Own the Tape

The 15-brick Renko gives the clearest read on short-term structure. Price is hovering near 8,640, still below the 500-SMA around 8,690, while the bearish Supertrend is positioned closer to 8,715.

That resistance cluster matters.

The sequence of lower highs near 9,053, 8,993, 8,847, and 8,828 shows sellers becoming more aggressive on each bounce. The index isn’t only correcting; it’s struggling to attract sustained demand.

Momentum remains soft. The RSI near 36 signals weak participation, though not outright exhaustion. The Z-Score SMA near -1.5 shows downside pressure is extended, but still aligned with the bearish move. A short-covering bounce wouldn’t surprise me after seven straight declines, but unless the ASX 200 can reclaim 8,690–8,715, any rebound still looks temporary rather than trend-changing.

ASX 200 Renko chart shows bearish pressure below the 500-SMA

ASX 200 15-brick Renko with price below 500-SMA, bearish Supertrend, RSI weakness, and negative Z-Score SMA

Source: TradingView

ASX 200 Outlook: 8,600 Is the Immediate Battleground

Current Trend Direction: Bearish
Bias: Negative
Key Support Levels: 8,255
Key Resistance Levels: 8,755, 9,230

Medium-Term Path: I expect the ASX 200 to remain vulnerable while it trades below the 500-SMA near 8,690 and the bearish Supertrend zone near 8,715. A short-term snap-back is possible after seven straight losses, but the cleaner path still points lower unless buyers reclaim that resistance band with conviction. A break below 8,600 opens the door toward 8,567, then 8,500.