AUDUSD on the verge of a breakout: Australia is ready to raise interest rates

Ahead of the NFP release, volatility in the AUDUSD pair has fallen noticeably, with quotes testing the 0.6900 mark. Find more details in our analysis for 3 April 2026.

AUDUSD forecast: key takeaways

• Westpac expects three rate hikes in 2026
• US Nonfarm Payrolls: previously at -92 thousand, projected at 65 thousand
• The Australian dollar received unexpected support from China
• AUDUSD forecast for 3 April 2026: 0.6975

Fundamental analysis

Today’s AUDUSD forecast takes into account that the Australian dollar is showing remarkable resilience, balancing on a knife edge between strong domestic support and an external geopolitical storm. The AUDUSD pair is trading around 0.6900, attempting to build on its upward momentum after the recent decline.

The RBA is gearing up for a hawkish attack: the rate may jump to 4.85%

The domestic driver for the AUD today is not just hawkish signals, but a real consensus on the inevitability of further policy tightening by the Reserve Bank of Australia.

On 17 March, the RBA raised the rate to 4.10%. But the market believes this is only the beginning.

Forecasts: Westpac expects three rate hikes in 2026 – in May, June, and August – taking the rate to 4.85%, the highest level since November 2008. The market estimates the likelihood of a rate hike at the May meeting at 55-71%.

Yesterday’s data showed that the number of job vacancies in Australia unexpectedly jumped to 337,900 in February, marking the highest level since November 2024. The labour market is overheating, and the RBA will have to act aggressively to cool inflation.

The AUD paradox: high rates are a magnet for carry traders, which supports the currency. But at the same time, this kills domestic demand: retail sales are falling, and the housing market is cooling, creating the risk of a sharp slowdown in the economy.

The Australian dollar received unexpected support from its main trading partner, China, across the ocean. China’s manufacturing PMI moved back above the 50-point level in March, raising hopes for a recovery in demand for iron ore, Australia’s main export, and other commodities, which traditionally boosts the AUD.

The dollar is waiting for Nonfarm Payrolls, with the market frozen. The key US labour market data for March – Nonfarm Payrolls (NFP) – will be released today. The AUDUSD forecast takes into account that NFP will come in better than the previous reading, with growth of 65,000 jobs expected.

High oil prices, with Brent above 110 USD, are a double-edged sword. On the one hand, they are pressuring the global economy; on the other, the Australian government has already allocated 1 billion AUD in the form of interest-free loans to key enterprises, including transport and fertilisers, to soften the blow from rising fuel prices. This is somewhat easing market panic and giving the industry some breathing space.

The AUDUSD pair today is a forward-looking trade. The Australian dollar is receiving strong support from domestic factors, including a highly hawkish RBA and strong vacancies data, as well as signals from China. But until investors see the US employment figures, the pair will remain trapped in the 0.6880–0.6920 range. As soon as NFP is released, the spring may uncoil, and the AUDUSD pair may experience higher volatility.

Technical outlook

After testing the lower Bollinger Band, the AUDUSD pair formed a Hammer reversal pattern on the H4 chart. At this stage, quotes remain within an ascending channel and, after the correction, continue to form an upward wave following this signal, with a potential upside target at the 0.6975 resistance level.

The AUDUSD forecast for 3 April 2026 also takes into account another market scenario, where quotes may form a downward wave towards the nearest support level at 0.6855 before growth.

AUDUSD overview

• Asset: AUDUSD
• Timeframe: H4 (Intraday)
• Trend: bearish
• Key resistance levels: 0.6975 and 0.7080
• Key support levels: 0.6855 and 0.6750

AUDUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout and consolidation above the 0.6975 resistance level would open the way for an upward wave. A stronger AUD and a weaker USD could further support the upside scenario.

• Buy Stop: 0.6975
• Take Profit: 0.7080
• Stop Loss: 0.6950

Alternative scenario (Sell Stop)

Consolidation below 0.6855 would indicate the return of sellers and the cancellation of the bullish bias. In this case, the price will likely decline towards 0.6750.

• Sell Stop: 0.6855
• Take Profit: 0.6750
• Stop Loss: 0.6890

Risk factors

The main risk factors for the Australian dollar remain further strengthening of the US dollar amid more hawkish Federal Reserve rhetoric, strong US labour market data, and easing geopolitical tensions in the Middle East.

Summary

The AUDUSD pair has stalled and is forming a correction amid expectations for US employment data. AUDUSD technical analysis suggests growth towards 0.6975 before a decline.

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