The Australian dollar in the pair with the American currency shows remarkable stress resilience, enabling AUD/USD buyers to open long positions on dips. After a sharp price drop to 0.6947 (the initial reaction to the outbreak of war in the Middle East), the pair recovered and stabilized within the 70 figure. On Tuesday, the Aussie is already approaching this year's price highs, overcoming the resistance level of 0.7110 (the upper line of the Bollinger Bands indicator on the four-hour chart). This price dynamic is explained by several fundamental factors.

Australia is dependent on imported oil (the country imports about 90% of the oil and oil products it consumes), so a sharp rise in prices for "black gold" will inevitably affect the dynamics of inflation, which was already accelerating at a rapid pace even before the Middle Eastern conflict. According to several experts, at current oil prices ($90-95 per barrel for Brent crude), the contribution of fuel to quarterly inflation will be about 0.1-0.2 percentage points.

It is also important to remember that the rising fuel prices will increase logistics costs, which will "filter through" to almost all sectors. Most goods in Australia are delivered across the country by trucks, so rising diesel prices will force retailers to reconsider prices on many products. The increase in aviation fuel prices will be reflected (has already been reflected) in the cost of airline tickets, which is quite significant for Australia, where the annual domestic passenger flow amounts to 60 million people. And so on, and so forth. At the same time, in January — before the events in the Middle East —the trimmed mean inflation index, which the RBA focuses on, accelerated to 3.4% in Australia, its highest level since October 2024.

From this follows the second fundamental factor, which explains the Aussie's character: this is the hawkish stance of the Reserve Bank of Australia. Last week, RBA Governor Michelle Bullock sent out a hawkish signal, stating that the central bank "does not necessarily need to wait for the first quarter inflation data for further interest rate hikes." Given that the quarterly data will be released in April and the next RBA meeting is next week, there is a non-zero probability that the central bank will tighten monetary policy parameters this month.

At the same time, the US Federal Reserve has noticeably softened its rhetoric in light of weak February Non-Farm Payrolls. It's worth noting that the U.S. unemployment rate rose to 4.4% last month, and the number of employed in the non-farm sector unexpectedly decreased by 90,000. This result led to a reassessment of long-term forecasts. Market participants still believe the Fed will keep all monetary policy parameters unchanged at the spring meetings, but they also see a 50% chance the central bank will implement a 25-basis-point cut in June.

Against the backdrop of hawkish signals from the RBA, the Fed's stance appears more dovish. The emerging divergence between the Fed and the RBA is favorable to AUD/USD buyers.

As we know, the Australian economy is closely linked to China, so any significant macroeconomic news from China has a substantial impact on the Australian dollar. This time, the Aussie reacted positively to China's inflation acceleration. The release turned out to be surprisingly strong: the overall CPI accelerated to 1.3% in January (the highest level in three years), after a weak 0.2% growth in December. Core inflation, excluding food and energy prices, jumped to 1.8%—the highest level since March 2019. Even the producer price index emerged in the "green zone." And although PPI remained in negative territory, the pace of its decline slowed in January (-0.9% in January compared to -1.4% in the previous month).

Chinese inflation has a direct impact on the dynamics of AUD/USD (as the Australian economy largely depends on demand from China), so this strong result was clearly interpreted in favor of the Aussie.

Thus, the current fundamental backdrop is conducive to further growth of AUD/USD.

From a technical standpoint, the pair on the daily chart is positioned between the middle and upper lines of the Bollinger Bands indicator and above all the lines of the Ichimoku indicator, indicating a bullish "Parade of Lines" signal. A similar pattern has formed on other timeframes—H4 and W1. It is advisable to use corrective pullbacks to open longs—with the first target at 0.7150 (the upper line of the Bollinger Bands indicator on the daily chart) and the main target at 0.7200 (the upper line of the Bollinger Bands on the weekly chart).