AUD/USD Squeezed Between 0.6980–0.7070 as Inflation Stays Elevated

AUD/USD is caught in a technical squeeze between 0.6980 support and 0.7070 resistance on March 25, 2026, as Australia's latest inflation data complicates the Reserve Bank of Australia's policy outlook. Annual CPI cooled slightly to 3.7% in February 2026, but remains stubbornly above the RBA's 2–3% target range, limiting the central bank's scope for rate cuts and providing a modest floor for the Australian dollar. The narrowing range reflects a market in equilibrium, with bulls pointing to still-elevated rate differentials and resilient commodity demand, while bears cite global growth concerns and the risk of further US dollar strength. Technically, the 0.6980 level aligns with the lower Bollinger Band and recent swing lows, while 0.7070 corresponds to a multi-week descending trendline resistance. A breakout above 0.7070 could target 0.7140, whereas a breakdown below 0.6980 may accelerate selling toward 0.6920. Traders should watch for shifts in risk sentiment and upcoming RBA guidance for the next directional move.