Published: 23 March 2026,05:29
Daily Market Analysis New
*The Australian Dollar holds near 0.7000 after the Reserve Bank of Australia raised rates to 4.10%, with markets pricing further tightening.
*Surging crude prices linked to disruptions in the Strait of Hormuz are keeping inflation elevated, reinforcing the RBA’s hawkish stance.
*Upcoming inflation data will guide direction—hotter CPI could push AUD/USD toward 0.71–0.7150, while softer data may trigger a pullback toward 0.69.
Market Summary:
The Australian dollar has traded resiliently around the 0.7000 level against the U.S. dollar in late March, having recently tested multi-year highs near 0.7120. This performance reflects sustained support from a hawkish Reserve Bank policy pivot and elevated inflation risks tied to surging oil prices amid Middle East geopolitical tensions, including disruptions in the Strait of Hormuz that have pushed Brent crude above $110 per barrel.
On March 17, the RBA raised its cash rate by 25 basis points to 4.10 percent—its second consecutive hike—in a tight 5-4 board decision. Governor Michele Bullock and the accompanying statement emphasized that inflation remains above target, with upside risks from excess domestic demand and external energy shocks. Markets now price in the possibility of additional tightening as early as May, widening the policy differential versus major peers and underpinning AUD strength despite Australia’s status as a net oil importer.
The RBA’s revised forecasts incorporate the impact of higher oil prices, with the central bank now projecting inflation to remain above the 2-3 percent target band for longer than previously anticipated. This hawkish repricing contrasts with the Federal Reserve’s recent dot plot signaling only one rate cut in 2026, reinforcing the yield advantage supporting the Australian dollar.
The key near-term catalyst is Wednesday’s release of the February Consumer Price Index. Headline CPI is consensus-expected to remain steady at 3.8 percent year-on-year, matching the January print, while the RBA’s preferred trimmed-mean measure is forecast around 0.3 percent month-on-month, holding the annual rate near 3.4 percent.
A hotter outcome—particularly in core components—would validate persistent inflationary pressures amplified by oil and reinforce expectations for further RBA hikes, potentially driving AUD/USD through 0.7100 toward 0.7150 resistance. Conversely, any downside surprise could ease tightening bets and expose the Australian dollar to risk-off flows from unresolved geopolitical volatility. Support sits at 0.6900, with stronger levels near 0.6950 representing the 50-day moving average .
Technical Analysis
The AUDUSD pair has established a lower-high price pattern since notching its 2023 peak at 0.7187, reflecting waning bullish momentum and a gradual shift in market structure. The pair is now sliding toward its critical support zone near the 0.6925 level, where a double-bottom formation previously provided a reliable floor.
A decisive break below this support would constitute a structural breakdown, invalidating the prior consolidation pattern and likely opening a path for stronger selling momentum. The measured move from such a breakdown projects toward the 0.6800 region initially, with deeper downside potentially targeting the 0.66500 level.
Momentum indicators remain firmly within bearish territory, reinforcing the negative near-term bias. The Relative Strength Index continues to trade below the 50-midpoint, reflecting sustained selling pressure, while the Moving Average Convergence Divergence remains entrenched below its zero line following a bearish crossover, confirming that downside momentum remains structurally dominant .
Resistance Levels: 0.7035, 0.7145
Support Levels: 0.6925, 0.6805
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