AUDUSD has successfully completed a V-shaped recovery from 17-year lows, unclocking a 15-month high of 0.7181 on Wednesday that is above its pre-crisis levels.
The recent improvement has also violated the long-term downtrend that started from the 2018 peak of 0.8135, with the golden cross within the 50- and 200-day simple moving averages (SMAs) adding credence to the advance.
The RSI and the Stochastics, however, have already entered the overbought territory, flagging that the bears might be around the corner. But the indicators have yet to hit a turning point and with the MACD gaining strength above its red signal line, the pair could maintain a bullish behavior if the 0.7200-0.7264 restrictive zone gives way. Note that the 200-weekly SMA is also placed within this area. Breaking that wall, the door would open for the December 2018 peak of 0.7392, while slightly higher the 0.7468 barrier could be another key number to watch.
Alternatively, if the 0.7112 level stops supporting the market in the four-hour chart, more losses could follow until the 0.7000-0.6968 region, where the 20-day SMA is currently placed. Moving lower, the bears may take some rest near the 50-day SMA before heading for the swing low of 0.6775. Another failure at this point would put the ongoing uptrend at risk.
Summarizing, AUDUSD is holding a bullish bias, though some caution is warranted as the market seems to be trading within overbought waters. A sustainable break above 0.7264 could strengthen the positive sentiment.
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