- AUD/USD fell over 1% from a multi-year peak as the US Dollar strengthened amid intensifying safe-haven demand.
- The hawkish Reserve Bank of Australia (RBA) may limit the downside, driven by escalating inflation pressures.
- The pair has retreated to a key technical inflection point between the 100-day MA (0.7072) and 200-day MA (0.7051), where the RSI is now signaling a potential shift in momentum in favor of bulls.
AUD/USD fell 1% + on Thursday with the pair reacting to a resurgent US Dollar as safe haven demand intensified due to Middle East tensions. AUD/USD was trading at a multi-year peak and thus a retracement may be welcomed in some quarters.
Hawkish RBA may limit downside
Inflationary pressures are intensifying in Australia, where the Melbourne Institute survey recently reported that March Consumer Inflation Expectations climbed to 5.2%, the highest level since July 2023.
This uptick from February’s 5% reading underscores the growing challenge for the Reserve Bank of Australia (RBA), which had already taken a proactive stance in early February by raising the Official Cash Rate (OCR) by 25 basis points to 3.85%.
As the ongoing energy crisis continues to drive costs higher, market speculation is mounting that the RBA and other global central banks will be forced to maintain an aggressive interest rate hiking cycle to contain burgeoning prices.
According to the latest LSEG data, markets are pricing in around a 78% probability of a 25 bps rate hike at the upcoming March 17, 2026 meeting.
Economic data ahead
While the Australian economic calendar remains quiet this Friday, the focus shifts to a heavy slate of data from the United States.
Markets are bracing for a series of high-impact releases, including the January Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation metric alongside January Durable Goods Orders.
Additionally, the preliminary March reading of the Michigan Consumer Sentiment Index will provide a fresh look at how the spike in energy prices and financial market volatility are impacting American consumer confidence.
For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Markets may remain at the mercy of geopolitical developments which could even overshadow tomorrow’s US data. The intriguing part about AUD/USD is the technical picture where the pair is at a key inflection point.
Technical Analysis – AUD/USD
From a technical point of view, AUD/USD has finally pulled back from its multi-year peak around the 0.7187 handle.
The pullback has brought the pair to a key inflection area resting between the 0.07072 (100-day MA) and 0.7051 (200-day MA) handles.
The previous impulse move to the upside occurred after a breakout of the 0.7034 handle which rests just below the inflection area.
AUD/USD Four-Hour Chart, March 13, 2026
Source:TradingView.com
Dropping down to a one-hour chart and there is some evidence that bulls may already be returning.
The price has slowed significantly as it approached the 0.7070 handle.
The bigger hint comes from the period-14 RSI which has just left oversold territory. This is usually seen as a sign that momentum has shifted in favor of the bulls.
An immediate hurdle on the H1 chart rests at 0.7100. Acceptance back above this level is needed before the 0.7130 and recent highs at 0.7187 come into focus.
AUD/USD One-Hour Chart, March 13, 2026
Source:TradingView.com
