Invest in AUDUSD with 0.72160 target ahead of Australia’s strong inflation report

AUDUSD is currently rebounding from a recent low of 0.70785, but this corrective rally looks rather restrained. The pair has not yet managed to consolidate above the 50.0% Fibonacci level. Meanwhile, technical indicators paint a picture of a fragile balance, with persistent bearish pressure on the daily chart.

Bollinger Bands align with this view. Prices are now sitting between the lower and middle lines, with the latter acting as a dynamic resistance level. The bands are not expanding, and the top boundary remains untested—the indicator is not detecting strong bullish momentum.

At the same time, the Chaikin Oscillator offers a glimmer of hope. The indicator has just exited the negative zone, signaling waning bearish pressure and recovering capital inflows. However, the pace of selling is slowing, suggesting that a significant influx of buyers has not yet arrived.

The Stochastic Oscillator makes the situation a bit trickier: its %K line is above the %D one, both are pointing upward, and the indicator is climbing into the 60–70 range, moving from neutral to overbought territory. This suggests strengthening bullish momentum in the short term, though room for further gains is narrowing as it approaches peak levels.

On the fundamental front, the Aussie is now getting support from an improved risk appetite amid progress in the peace talks regarding the Strait of Hormuz. However, renewed US activity in the region is keeping safe-haven demand alive, capping a potential rally in speculative assets. This week’s key event will be the publication of Australia’s inflation report. Strong readings could boost the national currency, making the central bank’s stance more hawkish. American macroeconomic data may also influence AUDUSD by the end of the week. Weak statistics could weigh on the US dollar and create more room for the pair to rally.

Consider the following trading strategy:

Buy AUDUSD at the current price (0.71570). Place Take profit at 0.72160. Set Stop loss at 0.71240.

The forecast is valid from May 26 till June 2, 2026.