- AUD/USD gained traction for the fourth straight session on Wednesday.
- Overbought conditions on short-term charts prompted some profit-taking.
- The set-up still favours bulls and supports prospects for additional gains.
The AUD/USD pair gained traction for the fourth consecutive session on Wednesday and reaffirmed the overnight breakthrough a strong resistance near the 0.7035-40 zone. The subsequent momentum lifted the pair to its highest level since April 2019, around the 0.7180-85 region.
Meanwhile, extremely overbought conditions on short-term charts prompted some profit-taking at higher levels amid fresh concerns about worsening US-China relations. This coupled with a modest rebound in the US dollar further collaborated to the latest leg of a pullback.
However, the fact that the pair has managed to clear a resistance marked by the 61.8% Fibonacci level of the 0.8137-0.5509 slump supports prospects for additional gains. Hence, any subsequent dips towards the 0.7100 round-figure mark might still be seen as a buying opportunity.
The pair seems poised to reclaim the 0.72000 mark and test the next important barrier near the 0.7230 supply zone. Some follow-through buying should pave the way for a move towards challenging 2019 yearly highs resistance, just ahead of the 0.7300 round-figure mark.
On the flip side, failure to defend the 0.7100 mark support might prompt some long-unwinding trade and accelerate the fall towards the 0.7035-40 resistance-turned-support. The corrective slide could further get extended towards the key 0.7000 psychological mark.
AUD/USD daily chart
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Technical levels to watch
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