• AUD/USD rises 0.47% to 0.7152 as traders price possible RBA rate hike.
• Major banks, including Goldman Sachs and Westpac, forecast a tightening next week.
• Oil near $87 raises inflation risks amid ongoing Middle East tensions.

The Australian Dollar extends its gains on Wednesday amid growing speculation that the Reserve Bank of Australia (RBA) will raise rates at next week’s meeting. At the time of writing, the AUD/USD trades at 0.7152, up 0.47%.

Aussie gains on expectations the RBA may tighten policy despite geopolitical uncertainty

The financial markets remain laser-focused on geopolitical developments in the Middle East. Hostilities between Israel and Hezbollah escalated amid mixed comments from the White House. Recently, the US President Donald Trump, in an interview with Axios, said that there are no targets left in Iran, and that at “any time I want it to end, it will end.”

Oil prices reversed their course, poised to end on a higher note, with WTI trading at $87.57 a barrel, up nearly 5%. This raises questions about the impact on inflation, despite the International Energy Agency (IEA) recommending tapping 400 million barrels. Additionally, one of the biggest ship insurers, Lloyd’s of London, said that all ships in the Strait of Hormuz will be insured.

RBA expected to raise rates next week

Given the backdrop, some banks, including Bank of America, Goldman Sachs, Westpac, and the National Australia Bank, expect a rate hike by the RBA.

RBA’s Deputy Governor Andrew Hauser said on Tuesday that there would be a “genuine” debate over whether to hike rates at next week’s meeting. Although there are reasons on both sides, he said, “Inflation is too high,” and that the ongoing Middle East conflict could push prices even higher.

US inflation data ignores the US-Israel and Iran conflict

On the data front, the US Consumer Price Index (CPI) in February was in line with estimates across headline and core readings. The CPI rose by 2.4% YoY, unchanged from January, while core CPI jumped by 2.5% YoY.

The data was benign, but traders should note that it fails to reflect the impact of high Oil prices triggered by the Middle East conflict.

Ahead, the Aussie’s economic docket will feature Consumer Inflation Expectations. In the US, traders will eye jobless claims, housing data and the Balance of Trade.

AUD/USD Price Forecast: Technical outlook

In the daily chart, AUD/USD trades at 0.7153. The near-term bias is bullish, with price extending above the cluster of rising simple moving averages that trail far below spot and confirm a well-established uptrend. The pair also respects a steeper ascending support line from 0.6897, indicating buyers defend progressively higher lows after the prior breakout above the broader rising trend line from 0.6673. RSI has rebounded from mid-50s to the low-60s, showing renewed positive momentum without entering overbought territory, which supports continuation rather than exhaustion at current levels.

Initial support emerges near 0.7120, where recent closes align with the higher ascending trend line and mark the latest reaction low, followed by 0.7050, close to prior consolidation and along the earlier rising support from 0.6673. A deeper pullback would expose the 0.7000 region, where price previously pivoted higher and the moving averages begin to gain relevance. On the upside, immediate resistance sits near 0.7200 as the next psychological barrier above spot, with a sustained break opening the path toward 0.7275, in line with the projected extension of the rising structure. A close back below 0.7050 would weaken the bullish bias and suggest a broader consolidation phase rather than trend extension.

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