AUD/USD Price Forecast: Bulls retain control amid RBA rate hike bets, ahead of US CPI

AUD/USD attracts buyers for the fourth straight day amid a combination of supporting factors.
Bets that the RBA will hike rates next week underpin the Aussie amid subdued USD demand.
Traders now look to the release of the crucial US CPI report for some meaningful impetus.

Haresh Menghani FXStreet

The AUD/USD pair prolongs its positive move for the fourth straight day and climbs to a fresh high since June 2022, closer to the 0.7200 mark on Wednesday. With the latest leg up, spot prices have rallied over 200-pips from the vicinity of mid-0.6900s, or the weekly low set on Monday, confirming a fresh bullish breakout through the 0.7130-0.7135 region, or the previous year-to-date high. Moreover, the fundamental backdrop favors bullish traders and backs the case for an extension of the recent well-established uptrend.

The Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser warned on Tuesday that the spike in Oil prices would push inflation higher and add to pressure for a rate rise at its policy meeting next week. Traders were quick to react and brought forward expectations for a second rate hike as early as next week. Moreover, the possibility of 58 basis points (bps) of tightening for this year is priced in the market, which, in turn, has been a key factor behind the Australian Dollar's (AUD) outperformance and pushing the AUD/USD pair higher.

The US Dollar (USD), on the other hand, struggles to attract buyers amid expectations that Crude Oil prices are no longer high enough to limit the US Federal Reserve's (Fed) ability to cut interest rates. US President Donald Trump hinted that the war in the Middle East could end soon, triggering a sharp turnaround in Crude Oil prices from the highest level since June 2022 set this week. Moreover, reports that the International Energy Agency (IEA) has proposed the largest release of oil reserves in its history further weigh on the black liquid.

This helps ease concerns about a potential war-driven surge in inflation and keeps hopes alive for further easing by the US central bank, which marks a significant divergence in comparison to the hawkish RBA and favors the AUD/USD bulls. That said, there were no signs of an end to hostilities. In fact, Iran experienced the most intense US-Israeli bombardments on Tuesday. Moreover, the Islamic Revolutionary Guard Corps (IRGC) escalated its operations and announced the start of targeting the US technological infrastructure in the region.

This keeps geopolitical risks in play, which acts as a tailwind for Crude Oil prices and the safe-haven buck. Traders might also refrain from placing aggressive directional bets and opt to wait for the release of the US consumer inflation figures, due later today. The crucial data will be looked upon for cues about the Fed's rate-cut path amid concerns that the closure of the Strait of Hormuz could lead to prolonged disruptions to oil supplies and rekindle inflation. This, in turn, will influence the USD price dynamics and provide some meaningful impetus to the AUD/USD pair.

Spot prices showed some resilience below the 200-period Exponential Moving Average (EMA) on the 4-hour chart earlier this week. A subsequent move beyond the 0.7130-0.7135 horizontal barrier favors the AUD/USD bulls and backs the case for further gains.

AUD/USD 4-hour chart

Technical Analysis:

The Moving Average Convergence Divergence (MACD) line remains above its signal line and in positive territory, while the positive histogram has started to contract, suggesting upside momentum is fading but not yet reversing. The Relative Strength Index around 63 stays above the 50 midline without entering overbought territory, reinforcing a positive tone with scope for further gains as long as pullbacks remain contained above higher supports.

Initial support emerges at 0.7120, protecting a deeper retracement toward 0.7070 and then the 0.7035 area, where prior lows converge ahead of the 200-period exponential moving average around 0.7010. A clear break below this broader support band would weaken the bullish structure and open the door toward 0.6980. On the upside, immediate resistance is located at 0.7175, the recent swing high, followed by 0.7200 as a psychological barrier. A sustained move above 0.7200 would signal a continuation of the short-term advance and expose the 0.7250 region next.

(The technical analysis of this story was written with the help of an AI tool.)

(This story was corrected on March 11 at 13:30 GMT to say that AUD/USD attracts buyers for the fourth straight day, not the third.)

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Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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