The AUD/USD pair experiences a decline, settling near 0.7060 in the early European session on Friday. The pair pulls back from levels close to three-year highs as escalating tensions in the Middle East enhance safe-haven flows, thereby bolstering the US Dollar. US President Donald Trump stated that stopping Iran from acquiring nuclear weapons and posing a threat to the Middle East is “of far greater interest and importance to me” than the price of oil. In the meantime, Iran’s newly appointed supreme leader, Mojtaba Khamenei, declared that the Islamic Republic aims to guarantee the effective closure of the Strait of Hormuz. He indicated that Tehran would seek to initiate additional fronts in the conflict should the US and Israel continue their assaults.
Conversely, strong expectations that the Reserve Bank of Australia will increase interest rates next week could potentially mitigate the Aussie’s declines. A poll indicated on Friday that 23 out of 30 economists anticipate the Australian central bank will increase the Official Cash Rate to 4.10% on March 17, whereas seven economists forecast no change. The latest forecast indicates a change from the February poll, which had projected rates to hold steady at 3.85%. The current median projection indicates that the cash rate is expected to attain 4.35% by the conclusion of 2026.
In the daily chart, the near-term outlook for AUD/USD appears to be slightly positive as the price remains above the ascending 100-day exponential moving average and is consolidating just below the recent peaks. Daily closes are consistently gathering in the upper half of the Bollinger Bands, with the bands showing a flattening trend. This suggests a continuation of upside momentum that is steady yet moderating, rather than signaling a blow-off top. The RSI has moderated from overbought levels exceeding 70 to the mid-50s, indicating that bullish momentum remains, albeit with diminished upward momentum following the surge earlier in the month.
Immediate support is identified at 0.7020, marking the recent consolidation floor, with subsequent support at 0.6950, corresponding to the lower half of the current Bollinger envelope and recent swing lows. A more significant pullback would reveal crucial support at 0.6900, followed by the 100-day EMA area near 0.6840. On the upside, initial resistance is positioned at 0.7120, the recent closing high, followed by 0.7150 and then 0.7200, where previous upper Bollinger Band extremes indicate stretched conditions.