Australian Dollar Forecast: AUD/USD Tests 0.7070 Support as “Hormuz Panic” Collides with RBA Hike Bets

On the 13th of March 2026, the AUD/USD market is looking pretty volatile as traders try to figure out whether to go with the local rate hike expectations or worry about the rising global tensions. The Aussie had actually hit a multi-year high of 0.7185 just a few days ago but has now dropped by over 1% overnight in response to all the increased hostilities in the Middle East. Iran has been threatening to shut down the Strait of Hormuz which has sent investors scrambling for the safety of the US Dollar.

Despite the Aussie taking a tumble the pair is still trading close to three year highs and is looking pretty good for a strong weekly gain. This is largely down to the huge shift in interest rate expectations ahead of the RBA meeting on the 17th of March – right now markets think there’s a 78% chance of a rate hike which is a pretty big jump from what they were thinking just a couple of days ago.

The Strait of Hormuz and its Effect on the AUD/USD

The main reason for the recent AUD/USD decline is the state of utter chaos in the Middle East, and the energy markets in particular. The Strait of Hormuz is seen as a key chokepoint for global oil supplies and the International Energy Agency is now warning of a huge disruption to oil supplies as tensions rise between the US and Iran. This has sent investors running to the US Dollar which had reached a 15 week high near 99.70 and has now put a lid on any gains for the Aussie.

Although Australia is actually a net energy exporter, which usually helps the Aussie, the wider impact of this global crisis on growth and risk assets is actually having a bigger effect at the moment.

RBA Hawkishness: Is the 4.10% Cash Rate Inevitable?

Even with all this global risk aversion going on, the Reserve Bank of Australia is actually acting early to try and head off any oil driven rise in inflation. Over the past 72 hours we’ve seen a pretty sharp jump in market expectations of a 25 basis point hike at the March 17 meeting – up from 31% to 78%.

Governor Michele Bullock has made it clear that the board will consider a rate hike whenever it feels necessary, and won’t wait until the Q1 CPI data comes in if inflation expectations start to rise.

Even the big banks are on the same page now with NAB and Westpac both expecting two rate hikes – one in March and another in May. They think the cash rate will move towards the 4.10% to 4.35% range.

AUD/USD Price Prediction: $0.7040 Support in Focus as Bulls Lose Momentum

From a technical perspective, the pair is looking like it’s lost a bit of momentum after failing to hold above 0.7130. We’ve seen it drop from its recent peak of 0.7182 and is now testing the mid Fibonacci range between 0.7069 and 0.7043.

The Aussie was moving upwards in the short term but the price has now dropped below the 50 day EMA and is close to the 200 day EMA at 0.7040 – which is a pretty key support for buyers

• Support at Risk: The 0.7040 level is the main level that needs to hold if we’re going to avoid a further drop down to 0.7005.
• Bullish Momentum Fading: If we look at the momentum picture, the RSI has fallen into the 35 to 40 range, showing that the bullish strength is starting to fade, but it’s still not oversold.
• Resistance: For the pair to turn bullish again, it needs to get back above 0.7130 and close above the 50 day EMA on the 2 hour chart.

Trade Idea: Consider buying if 0.7040 holds as support, aiming for a move back up to 0.7182, with a stop-loss below 0.7005.