Tomorrow is a big day for AUDUSD. On March 17, 2026, the Reserve Bank of Australia (RBA) will step into the spotlight, and the market will be watching closely. This make-or-break event could send the Aussie soaring or keep it grounded. While the Consumer Price Index (CPI) is cooling almost everywhere else, Australia is stuck in the 3.8%–4.1% range, far above the regulator's preferred 2%–3%.
Policymakers are now losing sleep over services inflation. Insurance, rents, and education have already proven to be immune to previous interest rate hikes. Just when the central bank thought it could catch a break, oil prices decided to crash the party. Brent crude surged above $90 in March, threatening to spark a "second round" of inflation. As a result, the RBA is running out of patience. A preemptive strike is looking more likely by the minute.
Meanwhile, the Australian labor market is showing strength no one expected. Unemployment hovers near historic lows at 3.7%–3.9%, and with workers being in short supply, firms are throwing high salaries to attract talent. Wage growth is currently clipping along at over 4%. For the regulator, this is a red flag waving furiously. When paychecks swell without productivity keeping pace, inflation gets a fresh dose of rocket fuel.
The big four banks (ANZ, CBA, NAB, and Westpac) have recently flipped their forecasts and joined the hawkish camp. Governor Michelle Bullock is widely anticipated to adopt the mindset that it is better to act aggressively now than to play catch-up later. If the accompanying statement leaves the door open for "further tightening", the Aussie won't fall far.
In essence, this isn't just another meeting for the regulator. Bulls are circling, and a hawkish surprise, such as a 0.25 rate hike, could ignite a sharp rally for the pair. The first upside target stands at 0.7110 resistance.
The ultimate recommendation is to buy AUDUSD if the RBA raises borrowing costs. Lock in profits at 0.7110. Place Stop Loss at 0.6950.
Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
