AUD/USD Price Forecast: Rebounds from two-month low to retake 0.6900; bearish bias remains
- AUD/USD attracts some buyers during the Asian session on Friday, though the upside seems limited.
- Trump’s Iran strike delay prompts some USD selling and supports spot prices amid the hawkish RBA.
- Emerging Fed rate hike bets amid inflation concerns should limit losses for the USD and cap the pair.
The AUD/USD pair stages a modest recovery from the 0.6870 region, or over a two-month low touched during the Asian session on Friday, amid a softer US Dollar (USD). Spot prices reclaimed the 0.6900 mark in the last hour, though the near-term bias seems tilted in favor of bearish traders and warrants some caution before positioning for any further gains.
The USD edges lower after US President Donald Trump announced that he will delay strikes on Iran’s energy infrastructure and extended the deadline to reopen the Strait of Hormuz until April 6. Furthermore, the Reserve Bank of Australia's (RBA) hawkish stance offers some support to the Aussie. That said, bets that the US Federal Reserve (Fed) would hike rates this year amid fears about rising inflation due to elevated energy prices should limit deeper USD losses and cap the AUD/USD pair.
From a technical perspective, the recent breakdown below the 23.6% Fibonacci retracement level of the November 2025-March 2026 upswing and the lower boundary of a short-term trading range favor bearish traders. Adding to this, the Moving Average Convergence Divergence (MACD) indicator tracks below its signal line in negative territory, reinforcing fading upside momentum. Furthermore, the Relative Strength Index (RSI) around 40 signals building but not extreme bearish pressure.
Meanwhile, the AUD/USD pair remains comfortably above the rising 100-day Simple Moving Average (SMA), which tempers the downside but does not negate the pullback.
In the meantime, immediate support stands just above the 100-day SMA around 0.6820, with a decisive break exposing the 61.8% retracement at 0.6717 as the next bearish target. On the upside, the 23.6% retracement at 0.7005 aligns as the first barrier if buyers regain control. A daily close back above 0.7005 would ease the current downside bias and open the way toward the 0.7080–0.7120 band. That said, failure to hold 0.6820 would strengthen the case for an extended correction toward 0.6720.
(The technical analysis of this story was written with the help of an AI tool.)
AUD/USD daily chart
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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