FxWirePro: AUD/USD slips on risk aversion as Middle East tensions escalate

AUD/USD slipped lower on Monday as investors shifted toward safe-haven assets following a sharp escalation in Middle East tensions.. Market sentiment deteriorated after Iran launched retaliatory strikes on U.S....

• AUD/USD slipped lower on Monday as investors shifted toward safe-haven assets following a sharp escalation in Middle East tensions.. • Market sentiment deteriorated after Iran launched retaliatory strikes on U.S. military facilities in Gulf states in response to recent U.S. attacks, while Tehran declared the strategic Strait of Hormuz closed, raising fears of significant disruptions to global oil supplies. • The geopolitical uncertainty lifted energy prices, with U.S. crude oil climbing around 3%, while equity markets came under pressure as S&P 500 futures slipped 0.3%.

U.S. Treasury futures also declined by five ticks as investors reassessed inflation risks stemming from higher energy costs... • Commodity-linked currencies such as the Australian dollar remained under pressure despite the rise in oil prices, as the broader flight to safety boosted demand for the U.S. dollar. •Meanwhile , attention is turning to key U.S. economic events later this week, including June inflation data and Federal Reserve Chair Kevin Warsh's testimony before Congress, both of which could shape expectations for the Fed's policy outlook. • Immediate resistance is located at 0.6952(SMA 20), any close above will push the pair towards 0.6983(38.2%fib).

• Support is seen at 0.6852(61.8%fib) and break below could take the pair towards 0.6823(Lower BB). Recommendation: Good to sell around 0.6930 with stop loss of 0.67000 and target price of 0.6880