• AUD/USD softened on Monday as doubts over a Middle East peace deal weighed on risk-sensitive currencies.
• The U.S. said Sunday it seized an Iranian cargo ship attempting to breach its blockade, while Tehran vowed retaliation, raising fears of renewed conflict.
• Tehran said it would skip a second round of talks the U.S. hoped to begin before the two-week ceasefire expires on Tuesday.
• Now in its eighth week, the war has triggered an unprecedented energy shock, with oil prices surging as the Strait of Hormuz handling about 20% of global oil remains effectively closed..
• The Australian calendar is light this week, so the Aussie's movements are likely to be dictated by headlines from the Middle East.
• Immediate resistance is located at 0.7218(23.6%fib), any close above will push the pair towards 0.7273 (Higher BB).
• Support is seen at 0.7125(38.2%fib) and break below could take the pair towards 0.7026(50%fib)
Recommendation: Good to buy around 0.7120 with stop loss of 0.7060, and target price of 0.7180
