- AUD/USD trades 0.43% higher as the dollar tumbles in the US session.
- There is a divergence pattern on the RSI that is not confirmed yet.
AUD/USD 4-hour chart
AUD/USD has been moving higher on Tuesday despite Australia continuing to struggle with the COVID-19 pandemic. Although the nation dealt with the first wave relatively well this time round the Australian government have had to enact a curfew in some of the worst-hit areas. The market also received the latest information from the Reserve Bank of Australia (RBA). The RBA did not mention the strong AUD but they did state they would keep bond buying at the current pace. The economic outlook is still uncertain due to the aforementioned lockdowns.
Looking at the chart below, there is a channel formation marked by the black trendlines. The key resistance is now the wave high at 0.7225 and if this level breaks the uptrend is firmly back on. Beyond that, the top of the channel could also be a resistance point.
The key feature on the chart is the Relative Strength Index divergence. This is when the price makes a higher high and the indicator makes a lower high. It indicates that the momentum of the move higher could be wearing thin. But the confirmation of the divergence is the break of the red support level at 0.7061. The MACD is showing signs of weakness as the histogram is red and the signal lines are still under the zero level.
Overall the pair is still in an uptrend. It is only wise to worry about the divergence if the red support level breaks to the downside. It would be hard to bet against the strength of this uptrend at the moment and if the psychological 0.72 area break it could be game on for the bulls.
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Additional levels
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