AUD/USD Price Analysis: Hits seven-week tops, bulls remain in charge ahead of NFP
|- AUD/USD gained strong follow-through traction on the last trading day of the week.
- Sustained breakthrough key barriers might have already set the stage for further gains.
- Overbought RSI on hourly charts warrants some caution ahead of the US jobs report.
The AUD/USD pair continued scaling higher through the first half of the European session and climbed to seven-week tops, around the 0.7435-40 region in the last hour.
The prevalent bearish sentiment surrounding the US dollar assisted the AUD/USD pair to build on its recent strong rebound from the 0.7100 mark, or YTD tops. Apart from this, the risk-on environment was seen as another factor that provided an additional boost to the perceived riskier aussie.
From a technical perspective, the overnight sustained move beyond 50-day SMA for the first time since June turned out to be a key trigger for bullish traders. A subsequent strength above the 0.7400 mark and the 0.7420-25 region might have already set the stage for an extension of the appreciating move.
The constructive outlook is reinforced by the fact that technical indicators on the daily chart have just started moving into the positive territory. That said, RSI (14) on hourly charts is flashing extremely overbought conditions and warrants some caution for aggressive bullish traders. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before placing fresh bullish bets. Nevertheless, the AUD/USD pair seems poised to prolong the upward trajectory towards an intermediate hurdle near the 0.7475-80 zone en-route the key 0.7500 psychological mark.
On the flip side, any meaningful retracement slide might attract some dip-buying near the 0.7400 round-figure mark. This, in turn, should help limit the downside for the AUD/USD pair near the 0.7375-70 region, or 50-day SMA, which if broken decisively might prompt some long-unwinding trade. The corrective pullback might then drag the AUD/USD pair further towards the 0.7300 round-figure mark, with some intermediate support near the 0.7330 region.
AUD/USD daily chart
Technical levels to watch
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