AUDUSD stands firm as Middle East ceasefire hopes build

The AUDUSD pair is staging a modest recovery, hovering near 0.70600 after bouncing off last week's lows. What's driving it? A palpable easing of geopolitical jitters in the Middle East, bolstered by reassuring signals from Washington that conflict resolution may be within reach. Such a shift in sentiment took the edge off safe-haven demand for the greenback, giving the Aussie some room to breathe.

Still, investors aren't rushing back in. The picture is hazy enough, and contradictory signals from officials are making it hard for traders to take a firm stance. Analysts at Goldman Sachs and JPMorgan agree on one thing: the staying power of the dollar's pullback hinges entirely on how long the tensions persist—and whether this is a truce or just a pause.

Meanwhile, the Great Southern Land's own fundamentals aren't exactly flashing green. Markets have already priced out most of the excitement around the Reserve Bank of Australia's (RBA) next move, with the odds of a rate hike now standing at just 20–30%. In other words, there is not much firepower behind the currency's upside at the moment, and any disappointment from the regulator could leave it vulnerable.

From a technical perspective, a recent rally has settled into a consolidation phase. The Relative Strength Index (RSI) sits near 49, dead center in the neutral zone, unable to decide which way to go. But beneath the surface, the Chaikin Oscillator tells a different story. It is firmly rising in positive territory, signaling that capital is still flowing in and bulls aren't ready to give up just yet. 

This week brings two big unknowns. Looking ahead, US inflation data could shake things up. A stronger print would likely boost the dollar, while any further signs of de-escalation in the Middle East should keep the Aussie supported. The RBA meeting on March 17 also looms large—interest rates are expected to hold steady, though the central bank's tone could shape the next move in the pair.

Consider the plan down below for your trading activities:

Buy AUDUSD at the current price. Lock in profits at 0.71460. Place Stop loss at 0.70150.

This forecast holds true from March 10 till March 17, 2026.