Australian Dollar Forecast: AUD/USD Tests 0.6970 as RBA-Fed Divergence Clashes with Geopolitical “Safe-Haven” Demand

On March 9, 2026, The AUD/USD is in an awkward spot as a surprise US jobs report – the so-called ‘NFP Shock’ – squares off against a resurgent Australian economy. Friday’s US jobs report revealed a net loss of 92,000 jobs in February, which has gone some way to denting the Dollar’s safe-haven status – not least because of worries about the state of the US economy.

This has given the Australian Dollar the boost it needed to bounce back from an earlier low of 0.6957 and start making a push for a key resistance area between $0.7000 and 0.7050.

Geopolitical Tension vs. The U.S. Labor Market Crash

At the start of the week, things looked a bit more rosy for the US Dollar, with military action in the Middle East sending dollars flooding in as people sought safe-haven assets. But the massive 92,000 job losses in one month, the biggest four-month decline since the pandemic, have sent alarm bells ringing about the potential for stagflation in the US.

Now traders have to weigh up the threat of global tensions versus the possibility that the Federal Reserve might have to start easing policy if the slowdown continues.

• The US non-farm payrolls came in a whopping 92,000 short of forecasts – a much bigger miss than anyone was expecting.
• The labour participation rate has slipped to a 5 year low, which is starting to suggest some pretty deep structural problems in the US economy.
• A further downwards revision to earlier data in December and January suggests that the US labour market was already starting to weaken before the February numbers came out.

The RBA Policy Divergence and the 4.10% Target

In stark contrast to the slowing US jobs market, the Reserve Bank of Australia is still in a very hawkish mood. Governor Michele Bullock has made it clear that every RBA meeting is a live one, which she backs up by pointing to strong 2.6% annual GDP growth and inflation running at 3.8%+.

This means that while US interest rates are probably on the way down, Australian interest rates could still be going up – which is making the Australian Dollar look a pretty attractive prospect for carry traders looking to make a buck.

Markets now reckon there’s a very good chance of another 25 basis point rate hike to 4.10% at the March 17 meeting. While household spending in Australia came in a bit lower than expected, the economy is still getting a boost from strong business investment and a higher than expected 6.9% saving rate.

There’s the bonus of record gold prices and stable iron ore exports helping to keep the currency afloat – even as worries about energy supplies in the Strait of Hormuz keep the market on the edge of its seat.

AUD/USD Technical Outlook and Trade Strategy

The AUD/USD’s 0.6957 support line has so far held firm, even in the face of several attempts to push it lower. If the pair manages to close above 0.7050 on the day, it could signal the end of the downward trend and set up a possible move up to 0.7135 and 0.7200.

• The RSI has swung back up from oversold territory and is now looking like it’s headed for 55 – which is a good sign that momentum is shifting in favour of buyers.
• The next resistance level is at 0.7033. If the pair can’t get a grip past 0.6957, it could well fall back to 0.6906.
• Everyone is on tenterhooks for the US CPI release on March 11 – which could be the final trigger that gets a clear move in the market going.

As of now, the majority of traders are playing the long side – if there’s a confirmed close above 0.7048 on the four hour chart. The RBA decision on March 17 is the big one – if the central bank sticks to its guns – or even raises rates – that’s going to be a huge boost for the Australian Dollar and could see the AUD/USD reaching new highs for the year as the policy gap with the US grows even wider.