Aussie in the Crosscurrents of Iran, Oil, and RBA HikesAUD/USDTASTYFX:AUDUSDtastyfxAUD/USD bounced more than 1% from Friday’s close to start the week as sentiment improved across risk assets on Monday. Still, the broader backdrop remains complicated – disruptions around the Strait of Hormuz have pushed crude prices sharply higher, injecting a fresh inflation impulse into the global economy. For Australia, the surge in energy prices is feeding directly into higher petrol costs and broader price pressures, complicating the domestic outlook even as the Australian Dollar remains sensitive to shifts in global commodity markets and risk sentiment. The Reserve Bank of Australia now faces a difficult policy backdrop as policymakers assess how the oil shock could influence the inflation outlook. Higher energy costs risk pushing headline inflation higher again, potentially reinforcing the RBA’s hawkish stance even as growth risks build. To this end, the RBA is expected to hike rates by 25-bps to 4.10% when they meet on Tuesday (11:30pm Monday ET). Traders will be watching the RBA decision closely for guidance on the rate path beyond this week and any language around energy-driven inflation risks. From there, attention shifts to the FOMC on Wednesday, where markets continue to push out expectations for rate cuts into the fall. In the above chart, AUD/USD may still be in the form of a bull flag, having broken out, retested the breakout level, and holding a consolidation above former resistance. Even though the pair has failed to generate topside momentum after setting a fresh yearly high last week, the lack of breakdown and rebound at the 50-day exponential moving average (EMA) reinforces the bull flag interpretation. With Monday’s close, AUD/USD is back above each of the daily 5-, 20-, 50-, and 100-EMAs. Once again, a break above the 2023 high at 0.7158 would validate the bull flag breakout and could open the path for a measured move towards 0.7230 (2022 resistance). On the other hand, a failure to hold above 0.7000 could invalidate the pattern and shift focus back to the downside.