Australian Dollar Forecast: Will the 0.6910 Floor Hold Amidst Risk-Off War Fears?

The AUD/USD pair finds itself in a pretty sticky situation on March 24 2026, as it languishes around 0.6977 . Just a week ago at it ticked up to multi year highs approaching 0.7185 , but a pretty hasty return to risk-off mode due to the ongoing US-Israel-Iran conflict has seen it get knocked back down to below that all important 0.7000 psychological mark.

As the market tries to weigh up the RBA’s hawkish stance of a 4.10% interest rate against the US Dollar’s bid as a safe haven , the pair has started to wobble and is now in full blown correction – testing the limits of its year to date up trend.

Geopolitical Friction: Safe-Haven USD vs. Australia’s Energy Tailwinds

It’s all about the battle between global risk aversion and Australia’s role as a net energy exporter at the end of March.

The War Premium: Despite some minor hopes of tensions easing between Iran and other countries in the Middle East the fact is the middle East conflict is still driving investors into the US Dollar

Oil Volatility: WTI has been all over the place – wild swings from $100 peaks down to as low as $89-$91 . and while high energy prices normally support the commodity-linked AUD – high oil prices are actually fueling fears of global inflation – and that is making the US Dollar even stronger as a defensive hedge in a risk-off world.

Stagflation Risks: Economists warn that when you throw high energy costs together with global growth concerns you get a pretty nasty cocktail that spells trouble for risk-sensitive currencies like the Australian Dollar

RBA Hawkishness: Can Domestic Strength Defy Global Gravity?

The price floor for the AUD is still built on the Reserve Bank of Australia’s pretty clear appetite for aggressively raising interest rates.

Policy Divergence: The RBA’s 4.10% cash rate and a pretty evenly split board (5-4 vote) that’s still watching out for inflation threats means the AUD has a higher interest rate to offer compared to a few of its G10 mates.

Labor Market Resilience: That big employment bump of 48,900 new jobs in February just proves that the Aussie economy is handling the rate hikes better than most people were expecting – which is actually giving the RBA a bit of breathing room to keep pushing rates up.

Flash PMIs and CPI: Now that everyone’s waiting to see how the Global Flash PMIs and the upcoming Australian CPI numbers play out, traders are trying to figure out if inflation is stubborn enough to push the AUD past that 0.7200 barrier in the second quarter.

AUD/USD Technical Outlook: Bearish Momentum Tests $0.6950 Support

The Aussie Dollar against the US Dollar on the 2 hour chart is currently trading at around 0.6977 after it dropped below a trend line that was running downwards and just slipped under both its 50 period moving average (the red line) and its 200 period moving average (the blue line). Not a good sign. Short term bearish momentum all over the place.

Price has been having a fight with the 0.7096 resistance area – it tried to break above it a few times but so far it’s still not managed to clear it – and its doing that thing where its forming lower highs. Then not long ago it bounced off the 0.6910 support zone but still can’t quite get back above the key 0.7010 and 0.7061 resistance levels which are now just blocking the way.

The RSI (Relative Strength Index) is hovering around a 45, showing that even the weak recovery momentum its currently showing isn’t strong enough to make it think a big change is just around the corner yet.

Bottom Line: If AUD/USD stays below 0.7010 then the downside risk towards 0.6953 and 0.6910 is still looking pretty likely.