FxWirePro: AUD/USD softens, inflation spike not as severe as expected

•  AUD/USD  dipped  on Wednesday after data showed Australia’s inflation rose a little less than expected in the first quarter.

• Australia’s CPI rose 1.4% in Q1, the fastest since late 2023, while annual inflation climbed to 4.1% from 3.6%, according to the Australian Bureau of Statistics..

• Core inflation (trimmed mean) rose 0.8% in Q1, slightly below the 0.9% forecast, with the annual rate edging up to 3.5% from 3.4%, remaining above the RBA’s 2–3% target.

•Markets are now pricing a 75% probability of a May 5 RBA rate hike, with further tightening likely to push AUD/USD above the 0.7250–0.7285 resistance zone.

•Geopolitics remains a key driver, as the Iran stalemate persists, with reports suggesting a prolonged blockade could keep global tensions elevated.

•Attention also turns to the Federal Reserve, where no rate change is expected at Wednesday’s FOMC meeting, marking Jerome Powell’s final meeting as Fed Chair.

•  Immediate resistance is located at 0.7219 (23.6%fib), any close above will push the pair towards 0.7280 (Higher BB).

•  Support is seen at 0.7112 (38.2%fib) and break below could take the pair towards 0.7100(SMA 20)

Recommendation: Good to buy around 0.7150 with stop loss of 0.7080, and target price of 0.7210