AUD/USD hit support at 0.7380 yesterday, rebounded, and today, it managed to overcome Friday’s high of 0.7440, thereby confirming a forthcoming higher high. Overall, the pair continues to print higher highs and higher lows above the upside line drawn from the low of Sept. 29.
While since Oct. 11, it’s been trading above the downside resistance line taken from the high of May 10. All these technical signs paint a positive short-term picture, in our view.
Bullish View
At the time of writing, the rate is testing the 0.7478 barrier, marked by the high of Sept. 3, where a break may invite more buyers into the action, pushing the pair towards the 0.7533 zone, a resistance marked by the high of July 7. If the bulls breach that resistance, the pair could head towards the peak of the day before, at 0.7600.
Shifting attention to our short-term oscillators, we see that the RSI moved higher but hit the 70 line and ticked down. At the same time, the MACD remains above both its zero and trigger lines.
Both indicators detect upside momentum and support the case for a surge. But, the RSI ticked down after hitting 70, suggesting that a pullback is likely before the next leg north.
Bearish View
On the downside, we would like to see a clear dip below 0.7290 before we start examining whether the outlook has turned negative again.
The rate could return below the diagonal lines, and the bears may shoot for the 0.7225 area, marked by the low of Oct. 6. Another break below 0.7225 could push the pair towards the low of Sept. 29, at around 0.7170.