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

The AUD/USD is laughing in the face of local economic trauma. Average pump prices just hit $2.40/L, representing the biggest monthly rise in history, yet global investors aren’t looking at the struggling Australian suburbanite. They’re looking at the spread. With the RBA boxed into a hawkish corner and U.S. jobless claims remaining firm at 207k, the yield advantage is finally being priced in with authority. I’ve watched the dollar index retreat to pre-war levels today as the Peace Trade takes over. Traders are betting on a diplomatic breakthrough in Pakistan. We’re in a massive short-covering rally.

Weekly Structure Defies Gravity

The macro view is looking cleaner than a whistle now. Looking at the weekly timeframe, the AUD/USD successfully navigated a brutal fundamental stress test, holding firmly above the long-term Supertrend floor at 0.67258 while systematically grinding through the resistance pivot. Bears are homeless. Momentum points upward. We’re targeting the 0.7300 ceiling next.

Weekly AUD/USD at Multi-Year Highs

Weekly AUD/USD candlestick chart showing price action breaking above short-term resistance and holding long-term Supertrend support. Source: TradingView

Daily Bulls Control the Tape

AUD/USD is looking like a rocket. The daily chart reveals a V-shaped recovery off the 0.6833 structural pivot that was so aggressive it forced the entire price complex back above the 21-EMA and now past 0.71875 resistance. I love the technical symmetry here. The market absorbed the geopolitical shock, found its footing at the previous breakout zone, and is now punishing the late sellers. The RSI is charging toward 70. We aren’t even overbought yet.

Daily AUD/USD Candlestick Chart with a V-shaped Recovery

Daily AUD/USD chart highlighting a sharp V-shaped recovery. Source: TradingView

Renko Rocketing Higher

The tape is sending a clear message. On the 0.001-brick traditional Renko chart, price has printed an uninterrupted run of green continuation bricks, reflecting aggressive buying straight off the lows. Price has now broken decisively above the 500 SMA, a level that had capped every rally attempt since late March. At the same time, the Z-Score SMA has stabilized above 1.0, adding statistical support to the strength of the move. There is some bearish divergence on the Z-Score SMA, which can signal some retracement but overall the path of least resistance still points higher for swing traders.

0.001 Renko Showing Green bricks above SMA

0.001-brick Renko chart of AUD/USD showing a strong bullish sequence. Source: TradingView

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Key Support Levels: 0.6725, 0.6833

Key Resistance Levels: 0.73

Medium-Term Path: I expect the AUD/USD to maintain its upward trajectory toward the 0.7300 cycle ceiling. Diplomacy is the driver. As long as the Islamabad headlines remain constructive and the daily 21-EMA holds, we’re looking at a re-test of 2022 highs. Watch the May 5th RBA meeting. A 25bp hike could be the final fuel needed to clear 0.7300.