AUDUSD has been printing fresh highs over the past three days, with the pair registering another one at 0.6569 early on Thursday.
The short-term risk is overall positive as the price is rising comfortably above the Ichimoku cloud and higher than the upward-sloping 20-day simple moving average (SMA) which has recently posted a bullish cross with the 50-day SMA, adding extra credibility to the market’s short-term uptrend. Moreover, the MACD continues to gain momentum above its red signal line, while the RSI and the fast-Stochastics have yet to clearly reverse lower despite warning about overbought conditions.
The nearest key resistance to keep in mind could be the 0.6655-0.6700 area, where the 200-day SMA is also positioned. In the event the bulls keep the upper hand above this region, the 0.6755 barrier could add some pressure ahead of the 0.6860 mark.
On the flip side, a pull back below 0.6500 may shift the spotlight towards the 0.6400-0.6448 zone formed by the 61.8% Fibonacci of the down leg from 0.7031 to 0.5506 and the red Tenkan-sen line. Next to defend the rally could be the 50% Fibonacci of 0.6268, where any violation would reduce confidence on the market’s uptrend, especially if the 0.6200 level is breached as well.
Looking at the medium-term picture, the pair is still holding a downside direction, though the negative outlook has further weakened following the continuous improvement the recent days. To achieve an outlook upgrade to neutral, the pair should run above 0.6755.
In brief, AUDUSD is expected to trade bullish in the short-term, though, room for improvement could be narrowing as the pair is approaching overbought territory.
