AUDUSD has been outperforming over the last month, after the rebound on the strong psychological level of 0.7500, which coincides with the medium-term ascending trend line. The pair has been in bullish phase since January 2016, supported by higher bottoms and higher peaks.
During the prior week, the price reached a new 4-month high near the 0.8040 resistance level, while the short-term indicators are also pointing to a continuation of the bullish bias. The 20 and 40-day simple moving averages are following the significant upward movement of the price, signaling further gains.
In addition, the RSI indicator is still holding in the overbought area and is pointing to the upside. However, there is also the case of a bearish scenario as the upswing may be running out of steam and the risk of a near-term correction is high. The stochastic oscillator is creating a bullish crossover within the %K and the %D slightly below the overbought zone.
After this month’s strong moves, the expectation for the pair is for further profit taking and could drive the price until the 0.8100 handle if the price surpasses 0.8040. A penetration above the aforementioned obstacle could open the door for the next immediate resistance of 0.8125.
On the flip side, if prices reverse lower, the next pause could be on the 0.7900 support level, which coincides with the 20-day SMA at the time of writing.
