- AUD/USD continued scaling higher for the third consecutive session on Tuesday.
- Strength beyond a descending trend-line has paved the way for additional gains.
- Slightly overbought RSI on hourly charts warrants some caution for bullish traders.
The AUD/USD pair gained traction for the third consecutive session on Tuesday and climbed to fresh two-week tops, around the 0.7735 region during the first half of the European session.
The emergence of some fresh selling around the US dollar – triggered by a modest pullback in the US Treasury bond yields – was seen as a key factor driving the AUD/USD pair higher. Bulls are now looking to build on the momentum further beyond a one-month-old descending trend-line resistance.
Meanwhile, technical indicators on the daily chart have again started moving into the positive territory and support prospects for additional gains. However, RSI on hourly charts is already flashing slightly overbought conditions and warrants some caution for aggressive bullish traders.
Hence, it will be prudent to wait for some intraday consolidation or a modest pullback before positioning for any further near-term appreciating move. Nevertheless, the AUD/USD pair seems all set to challenge the 0.7770-75 supply zone and aim back to reclaim the 0.7800 mark.
On the flip side, the 0.7710-0.7700 region now seems to protect the immediate downside. Failure to defend the mentioned support might prompt some technical selling and turn the AUD/USD pair vulnerable. The downward trajectory could then extended to retest sub-0.7600 levels.
AUD/USD 4-hourly chart
Technical levels to watch
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