- AUD/USD gained some strong follow-through traction and rallied to over four-month tops on Monday.
- Slightly overbought conditions on hourly charts prompted traders to take some profits off the table.
- The near-term bias still seems tilted in favour of bulls as the focus shifts to RBA decision on Tuesday.
The AUD/USD pair maintained its strong bid tone through the mid-European session, albeit has retreated around 45-50 pips from over four-month tops set earlier this Monday. The intraday positive momentum struggled to find acceptance above a resistance marked by the top end of over one-month-old ascending trend-channel.
However, the fact that the pair has broken through the very important 200-day SMA, the near-term set-up still seems tilted in favour of bullish traders. However, slightly overbought conditions on hourly charts seemed to be the only factor prompting some profit-taking ahead of the latest RBA monetary policy update on Tuesday.
Meanwhile, technical indicators on the daily chart have also moved on the verge of breaking into the overbought territory and warrant some caution before placing any fresh bullish bets. This makes it prudent to wait for some near-term consolidation or a modest pullback before again positioning for the next leg up.
That said, any downfall towards the 0.6700 round-figure mark might still be seen as an opportunity to initiate fresh bullish positions. This, in turn, should help limit the downside near the 200-DMA resistance breakpoint, around the 0.6680-75 region, amid the continuous selling bias surrounding the greenback.
On the upside, some follow-through buying beyond the trend-channel resistance, leading to a subsequent move beyond the daily swing high near the 0.6770 region, will reinforce the bullish outlook. The pair might then accelerate the move towards the 0.6800 round-figure mark en-route the next major hurdle near the 0.6835-40 region.
AUD/USD daily chart
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Technical levels to watch
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