Australian Dollar Forecast: Will the 4.3% Unemployment Surge Break the Aussie’s 0.7000 Floor?

Published: March 19, 2026

Key Points

• A significant increase of 48.9K jobs was reported, but the unemployment rate rose to 4.3%, complicating the Reserve Bank of Australia's (RBA) monetary policy.
• The US Dollar Index (DXY) is stable around 99.50, influenced by the Federal Open Market Committee's (FOMC) hawkish stance and safe-haven demand due to the ongoing conflict in the Strait of Hormuz.
• The AUD/USD pair is currently in a technical wedge, with critical levels at 0.7018 for support and 0.7056 for resistance.

Current Market Situation

The AUD/USD pair is trading at approximately 0.7037 as of March 19, 2026. The market is in a state of uncertainty, particularly due to the RBA's recent interest rate hike to 4.10% amidst rising inflation driven by geopolitical tensions. The conflicting signals from the labor market and a strengthening US Dollar are creating pressure on the Australian Dollar.

The Jobs Paradox

The Australian Bureau of Statistics (ABS) reported a surprising addition of 48.9K jobs in February, nearly doubling the previous month's figures and exceeding forecasts. However, the unemployment rate unexpectedly increased to 4.3%, up from the anticipated 4.1%. This anomaly suggests that more individuals are entering the job market, likely in response to rising living costs exacerbated by oil price hikes.

Impact of US Dollar Strength

The DXY remains resilient around 99.50, bolstered by a hawkish FOMC statement and ongoing geopolitical tensions. The Fed's focus on maintaining price stability, particularly with oil prices nearing $100 due to the US-Iran conflict, has further strengthened the US Dollar. This 'war premium' is overshadowing the yield appeal of the Australian Dollar, raising concerns about its ability to maintain its value as a commodity haven.

Technical Analysis of AUD/USD

On the technical front, the AUD/USD pair is currently near 0.7037, having faced resistance at 0.7121 and slipping below the pivotal level of 0.7056. The price is caught between a rising support trendline near 0.7000 and a descending trendline from February's high, indicating a potential breakout. Key moving averages are providing resistance, and the Relative Strength Index (RSI) suggests diminishing bullish momentum.

Outlook

A sustained break below 0.7018 could lead to further declines towards 0.6979 and possibly 0.6945. Conversely, reclaiming 0.7056 and closing above 0.7090 would shift the short-term bias back towards 0.7121 and 0.7160. The AUD/USD is at a critical juncture, and upcoming US labor data will likely influence its direction.

Conclusion

The Australian Dollar is currently facing significant challenges, with the labor market presenting mixed signals and external factors like geopolitical tensions impacting its stability. Traders should closely monitor the 0.7018 support level as the market awaits further economic data.