USD/JPY and AUD/USD Forecast: Dollar Retreats as Risk Assets Rebound on Hormuz Strait Escort Headlines
March 15, 2026 – By David Scutt, Market Analyst
The US dollar appears to have hit near-term peaks amid a shifting market sentiment fueled by geopolitical headlines concerning the Strait of Hormuz. Reports that a coalition of nations may escort commercial vessels through the strategic waterway have triggered a reassessment by traders, boosting risk appetite and leading to a retreat in the greenback. This dynamic is especially notable in key currency pairs such as USD/JPY and AUD/USD.
Hormuz Strait Headlines Ease Dollar Strength
The recent surge in the US dollar was bolstered by geopolitical tensions in the Gulf region, but this momentum has slowed following news that the Trump administration may unveil plans imminently to involve multiple countries in escorting ships through the Strait of Hormuz. According to The Wall Street Journal, these moves are aimed at securing energy supply routes that have been threatened by attacks on tankers, raising hopes for a reduction in supply risk.
Comments from former President Donald Trump, reported by Reuters, indicate ongoing discussions with several nations about providing security in the strait. However, it is important to note that these initiatives remain in the proposal stage, with no formal agreements signed and no guarantees that such escorts will prevent future escalations.
The timing of these developments—emerging during early Asian trading hours, a period known for low liquidity—has contributed to volatility and exaggerated market movements. Nevertheless, the prospect of normalized energy flows has been enough to cool oil prices somewhat and ease the dollar’s recent gains. Asian stock indices and US futures have rallied on this improved risk sentiment, signaling a temporary reprieve from worst-case supply disruption fears.
Despite the softer reaction in oil prices—Brent crude remains relatively flat after pulling back from session highs—the embedded geopolitical risk premium suggests that markets are far from confident that the issue is fully resolved.
USD/JPY Faces Key Technical Test Amid BOJ Intervention Concerns
In foreign exchange markets, the Japanese yen has weakened against the greenback, but signs of intervention risk loom. Japan’s finance minister, Shunichi Katayama, recently reiterated that Japanese authorities stand ready to take decisive action in currency markets if needed. This warning, coupled with stretched dollar positioning following a strong two-week rally, has accelerated some profit-taking on the greenback.
Technically, USD/JPY remains in a robust uptrend supported by upward sloping 50-day and 200-day moving averages. Momentum indicators like the MACD and RSI remain positive, signaling bullish strength. However, the critical level to watch is 159.45— the January high prior to the recent breakout to multi-year peaks. This level will serve as the first meaningful test to validate whether the current rally can sustain itself.
- If USD/JPY holds above 159.45, the bullish trend is likely to continue, with further upside potential.
- Failure to hold above this level may prompt a retracement toward trendline support near 157.88, 156.53, and the 50-day moving average.
AUD/USD Maintains Bullish Structure Supported by Risk Appetite
The Australian dollar has also benefited from the improved risk sentiment, bouncing again after dipping below the 0.7000 mark—the psychological level it tested during previous spikes in Middle East tensions. Since early February, AUD/USD has formed a series of higher lows and is trading above the 50-day moving average and the longer-term November uptrend line, preserving its broader bullish framework.
Although momentum indicators such as MACD and RSI have softened, moving toward neutral rather than bearish territory, the fundamental backdrop remains supportive. Given that the Australian dollar often serves as a proxy for global risk appetite, any tide uplift in risk assets can help offset downward pressures stemming from softer energy prices.
The key resistance level remains at the February 2023 high near 0.7160, where the pair has struggled to break through recently. Should the pair fail to build on the current bounce above 0.7000, attention may turn to supports at the February uptrend line, the 50-day moving average, the November uptrend line, and psychologically important 0.6900. —
Summary and Outlook
While the dollar’s recent rally might have paused amid easing energy supply fears and tentative geopolitical détente, traders should remain cautious. Much hinges on whether the coalition plans to escort traffic through the Strait of Hormuz will materialize and effectively reduce risks, or whether tensions will resume, driving volatility once again.
In the meantime, USD/JPY’s ability to sustain gains above critical resistance and AUD/USD’s resilience around 0.7000 will serve as barometers for market risk sentiment. Investors and traders will continue to monitor geopolitical developments closely, alongside technical signals, to gauge the durability of the current moves in FX markets.
This article is for informational purposes only and does not constitute investment advice. Market conditions are subject to change and readers should conduct their own analysis or consult with a financial advisor before trading.