AUD/USD has been gaining increased upside momentum over the past two weeks, reclaiming the 0.76 handle in the process. Momentum indicators are bullish with RSI comfortably above 50, but with the stochastics stuck in overbought territory for much of the past week, it’s only a matter of time till prices see some correction or consolidation.
If prices maintain their uptrend, resistance could come at around 0.7685, which is the 78.6% Fibonacci level of the April-May downleg from 0.7834 to 0.7144. Failure to beat the July 15 high of 0.7676 could weaken the positive bias.
To the downside, the nearest key support is provided by the 61.8% Fibonacci level at 0.7570. Further losses could see prices falling towards the 50% Fibonacci level at around 0.7490. This is also where the 50-day moving average is converging. A breach below this level could shift the bias back to negative.
In the longer term, AUDUSD maintains its neutral to positive outlook with prices trading above both the 50- and 200-day moving averages.
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