AUD/USD: a stable labor market and high inflation are the main reasons for the continued “hawkish” course in Australia

20 apr 2026, 13:31:22

Current trend

The AUD/USD pair has been steadily rising since the beginning of the month, reaching a 5-year high of 0.7220 last week. However, today the price has fallen to 0.7115 amid a renewed escalation in tensions in the Middle East.

Positive signals about the possibility of a US-Iranian peace agreement, which would provide for Iran to abandon its nuclear program in exchange for access to frozen assets and security guarantees, have given way to significant negativity: over the weekend, the Islamic Revolutionary Guard Corps (IRGC) again closed traffic through the Strait of Hormuz in response to the US refusal to lift the blockade of Iranian ports, and media reports have surfaced that Tehran has canceled diplomatic consultations scheduled for today in Islamabad. Thus, the two sides are once again close to resuming open hostilities, significantly increasing the likelihood of rising energy prices and a global economic downturn, which is reducing investor risk appetite.

Nevertheless, stock prices are currently seeking to recover lost ground amid the expected divergence in the monetary policy paths of the Reserve Bank of Australia (RBA) and the US Fed in the medium term. Experts expect the RBA to raise the interest rate in May with a 68.0% probability, as unemployment remained at 4.3% in March, total employment increased by 17.9K against the forecast of 19.1K, and full-time employment increased from –27.7K to 52.5K. Meanwhile, the weighted average consumer price index in February was 3.7%, while the trimmed figure was 3.3%, above the target range of 2.0–3.0%, excluding the impact of the March fuel price increase. Meanwhile, the US Fed may return to “dovish” rhetoric by the end of the year: in March, headline inflation reached 3.3% instead of the preliminary estimate of 3.4%, and core inflation reached 2.6% instead of 2.7%.

Overall, despite the corrective pullback, the potential for a resumption of “bullish” momentum for the AUD/USD pair remains.

Support and resistance

The pair is testing the 0.7141 level (Murrey [5/8], Fibonacci retracement 61.8%), and consolidation above the 0.7202 level (Murrey [6/8]) will allow it to reach targets of 0.7324 (Murrey [8/8]) and 0.7446 (Murrey [+2/8]). However, if the middle line of Bollinger Bands at 0.7019 (Murrey [1/8]) is broken, a decline to the region of 0.6835 (Murrey [0/8]) and 0.6713 (Murrey [–2/8], Fibonacci retracement 38.2%) is expected.

Technical indicators are not giving a unified signal: Bollinger Bands are turning up, the MACD histogram is increasing in positive territory, and the Stochastic is leaving the overbought zone.

Resistance levels: 0.7202, 0.7324, 0.7446.

Support levels: 0.7019, 0.6835, 0.6713.

Trading tips

Long positions can be considered above 0.7202 with the targets at 0.7324, 0.7446, and stop loss is 0.7110. Implementation period: 5–7 days.

Short positions can be considered below 0.7019 with the targets at 0.6835, 0.6713, and stop loss is 0.7135.

Scenario

Timeframe	Weekly
Raccomandazioni	BUY STOP
Punto di ingresso	0.7205
Take Profit	0.7324, 0.7446
Stop Loss	0.7110
Livelli chiave	0.6713, 0.6835, 0.7019, 0.7202, 0.7324, 0.7446

Scenario alternativo

Raccomandazioni	SELL STOP
Punto di ingresso	0.7015
Take Profit	0.6835, 0.6713
Stop Loss	0.7135
Stop Loss	0.6713, 0.6835, 0.7019, 0.7202, 0.7324, 0.7446