Australian Dollar Forecast: Will Hormuz Panic Shatter the 0.6944 Support?

The AUD/USD pair is on a knife edge at 0.6966 on the 23rd of March 2026, coming in at a make-or-break moment. The Reserve Bank of Australia having just taken its cash rate to 4.10% in a bid to snuff out what they see as a secondary inflation wave is being largely ignored by the markets right now though, as a US-Israel-Iran war is routing the pair into a bearish breakout.

As the situation with the Strait of Hormuz continues to escalate, President Trump’s ultimatum to get the Strait open within 48 hours is shifting the balance decidedly in favors of the US dollar as a safe-haven currency.

The Aussie on the other hand, which has a long history of being a safe-haven for investors when the rest of the world is getting skittish, is at the moment being overridden by the sheer strength of the US dollar.

The Strait of Hormuz Standstill: Big Bucks Flipping to Safe-Haven USD

The real driving force behind the markets today is a complete and utter standstill in the flow of oil through the crucial Strait of Hormuz.

Trump’s 48-Hour Deadline: Effective immediately, President Trump has gone and put the Iranian energy infrastructure on notice – if they don’t get the Strait open by late Monday then US military strikes on it are on the cards.

Safe-Haven Surge Hits Hard: This growing belligerence has already set off a rush into the US dollar (DXY) as global investors scramble to get into safe currencies. So its no surprise to see the DXY holding firm near 99.62 at the moment, but with Asian stocks being absolutely hammered it’s not a rosy picture.

Raw Material Prices All Over the Shop: While a jump in oil prices to above $112 a barrel (Brent) is a definite help to Australia’s commodity exports, the immediate dangers to the Aussie dollar from a ‘risk off’ trade are right now outweighing the benefits.

RBA Hawkishness – That March 25 Inflation Data Is Going To Be HUGE

Despite all the global doom and gloom, there’s a rock solid reason why the Aussie dollar will stay relatively strong – and its called the Reserve Bank of Australia’s decision to jack up interest rates as fast as they can

4.10% Cash Rate – More Hikes To Come: Just last week the RBA hiked rates by 25 basis points with a super close 5-4 vote – largely because they’re still worried that energy price shocks are going to keep inflation above target.

Inflation Paradox: Australian consumers are bracing themselves for some pretty sticky inflation – in fact expectations are now at a 3 year high of 5.2% so it looks like the RBA is going to have to think about upping the ante again.

March 25 – The Day That Could Change Everything: The entire market is waiting with bated breath for the February CPI numbers – and at the moment – the prediction is that headline inflation will creep up to 3.9% year on year – which in turn could push the RBA in the direction of that 4.35% peak rate before May.

AUD/USD Technical Outlook: Bearish Breakdown Below 0.70

AUD/USD is stuck around 0.6966 on the 2 hour chart after falling through the ascending trendline that had been propping up the price since late winter for the most part. It’s also slipped below the 0.6999 level of horizontal support, which pretty much confirms the short term bearish momentum is still in swing.

The pair is still sitting below both the 50 period average and the 200 period average, and its getting to the point those two lines are starting to flatten out and tilt downwards. This is a sign that the upside trend is weakening. The descending upper trendline from that high at 0.7190 continues to cap any rallies, forming a pattern that at first looked like a contracting triangle, but is now clearly resolving downwards instead.

Immediate support for the price is at 0.6944 – then 0.6907 and 0.6871. On the flip side, 0.6999 and 0.7044 are now acting as resistance.

The RSI is slowly making its way towards 30 – showing the downward pressure on the price without any clear sign of a reversal. As long as AUD/USD stays below 0.7000 and that broken trendline, the bias is looking more and more like a move towards the 0.69 area.