AUD/USD Forecast: Aussie Dollar Reclaims 21-EMA as Hormuz Shock Tests Westpac Sentiment

With all these daily spikes in energy prices, the consumers are breaking. We’ve watched the geopolitical landscape completely deteriorate over the weekend, sending massive shockwaves through the global supply chain as the Strait of Hormuz closure instantly creates an unprecedented, vicious energy shock that absolutely guarantees inflationary pressure in the short to medium term. The RBA, like most if not all central banks, is trapped. They hiked to 4.10%. They can’t cut rates now while crude oil unleashes a secondary wave of supply-side inflation, completely paralyzing domestic monetary policy. Look at the data. The upcoming Westpac Consumer Confidence index for April can be a brutal, double-digit collapse in sentiment, which would reflect a deeply pessimistic Australian public struggling to survive under the crushing weight of skyrocketing mortgage costs and soaring pump prices. Panic is setting in. But perhaps it is time to be greedy when others are fearful. Long AUD/USD anyone?

Westpac Consumer Confidence Potential Drop

Bar chart showing Australian consumer confidence. Source: TradingView

Weekly Squeeze Defends 0.6725 Support

Bears got trapped. The squeeze is on. Looking closely at the overarching weekly structure, we can clearly observe how the dramatic, fundamental panic flush entirely failed to break the critical floor via the long-term Supertrend, allowing heavily capitalized institutional algorithms to aggressively defend the 0.6725 level. They bought it. The AUD/USD pair currently trades away from the Short Supertrend pivot, leaving fundamentally biased retail short sellers hopelessly underwater as they stubbornly bet against a currency that continues to wildly outperform deeply pessimistic, recessionary expectations. Momentum points upward. Targeting the 0.71875 ceiling.

AUD/USD Weekly Supertrend

Weekly candlestick chart of AUD/USD showing price above Supertrend support levels. Source: TradingView

Daily EMA Flips to Support

Indeed, buyers took control. Momentum shifted completely. The daily chart carved out a V-shaped recovery directly off the 0.6833 structural pivot, forcefully dragging the entire price action complex straight back above the 21-EMA that now acts as a dynamic support zone. The structure changed. The RSI sits above 50, wiping out previous bearish divergence, and immediately shifting near-term power dynamics directly back into the hands of aggressive swing buyers who refuse to surrender this newly claimed territory. I love trading these mechanical breakouts. They brutally punish the late crowd who blindly chased the initial geopolitical breakdown, completely ignoring the obvious structural demand that patiently waited to violently absorb their panicked, emotionally driven liquidity. We push higher.

AUD/USD Daily 21 EMA Breakout

Daily AUD/USD chart highlighting a V-shaped bounce crossing the 21 EMA. Source: TradingView

Renko Bulls Capture 500 SMA

Analyzing the 0.001-brick traditional Renko exposes an unbroken, rigid sequence of green continuation bricks that systematically triggered algorithmic buy programs straight up from the lows, ultimately shattering the looming 500 SMA that previously capped rallies. Squeeze is on. The Supertrend flashed a mechanical buy signal, establishing a solid, definitive foundation for any impending intraday pullbacks that nervous, undercapitalized retail traders might foolishly attempt to fade in this chaotic environment. The underlying RSI is registered as constructive, above 50, while the oscillating 20-period Z-Score steadily normalizes near an unassuming -0.19 (at the time of writing), providing hard, statistical confirmation that the immediate downside velocity has definitively exhausted itself. Don’t fight it.

AUD/USD 0.001-Brick Renko Breakout

Renko chart of AUD/USD with 0.001 brick size crossing above the 500 SMA. Source: TradingView

The Verdict

Current trend direction: Bullish

Bias: Positive

Key support levels: 0.6725, 0.6833, 0.686

Key resistance levels: 0.71875

Medium term path: I expect AUD/USD to grind higher, although erratically, toward the 0.71875 cycle ceiling, fueled primarily by aggressive short-covering, provided the newly reclaimed daily EMA successfully absorbs any secondary selling pressure from exhausted intraday profit-takers. If we lose that dynamic support, we cascade back to 0.6833.