AUD Dives as Rate Hike Expectations Rise and Oil Prices Soar
The Australian Dollar (AUD) continued its decline against the US Dollar (USD) on Monday, weighed down by a risk-off market mood and rising expectations of a Federal Reserve interest rate hike.
Oil prices remained above $100, with the situation in the Middle East contributing to the increase. The Strait of Hormuz has been practically closed due to attacks on commercial vessels, while Iran-backed Houthis have threatened to blockade the Bab el-Mandeb Strait, forcing Gulf countries to reroute shipping through the Suez Canal and increasing freight prices exponentially.
The AUD/USD price has extended its reversal from last week's highs near 0.7240 to session lows a few pips above the support area around 0.7110, which is under pressure.
Bulls are likely to be tested at Friday's high of 0.7187, ahead of the mentioned 0.7240 area, while bears aim to test key support around 0.7110.