AUD/USD Price Analysis: Sits near multi-month tops, below 0.7200 mark ahead of FOMC

• AUD/USD gained traction for the fourth straight day and shot to 15-month tops on Wednesday.
• Overbought conditions on the daily chart held investors from placing aggressive bullish bets.
• The set-up remains firmly tilted in favour of bulls and supports prospects for additional gains.

The AUD/USD pair edged higher for the fourth consecutive session on Wednesday and shot to the highest level since April 2019, with bulls now awaiting a sustained move beyond the 0.7200 mark. Given that the pair last week managed to attract some dip-buying near the 0.7065-60 region (previous YTD tops set on June 10) the subsequent positive move supports prospects for additional gains.

The constructive outlook is further reinforced by the fact that oscillators on hourly charts have been gaining positive traction and are still far from being in the overbought territory. However, technical indicators on the daily chart have been pointing to slightly overstretched conditions and held investors from placing aggressive bullish bets ahead of the FOMC decision.

Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for an extension of the pair’s recent bullish trend witnessed over the four months or so. Some follow-through buying beyond the 0.7200 round-figure mark will reinforce the bullish bias and set the stage for a move towards testing the next major hurdle near the 0.7240-50 supply zone.

On the flip side, any meaningful dip might still be seen as an opportunity to initiate fresh bullish positions, which should help limit the slide near the 0.7150-40 horizontal support.

AUD/USD 4-hourly chart

Technical levels to watch