AUD/USD Price Analysis: Steadies around 0.7100 amid hidden bearish RSI divergence
- AUD/USD seesaws around five-month high as bulls take a breather after four-day uptrend.
- Higher highs on RSI (14) contrast with the lower high on prices to probe the bullish trend.
- Overbought RSI conditions, seven-month-old horizontal hurdle also challenge buyers.
- 61.8% Fibonacci retracement, previous weekly high restrict immediate downside.
AUD/USD pauses the four-day uptrend around the highest level since August 2022 as it makes rounds to 0.7100 during Thursday’s sluggish Asian session. Even so, the Aussie pair braces for the biggest weekly gains since early November.
The quote rose to the multi-month high on crossing the 61.8% Fibonacci retracement level of its April-October 2022 downside. However, the overbought RSI (14) seems to probe the buyers afterward.
Also challenging the upside bias is the hidden bearish RSI divergence, a condition where the price prints lower highs but the indicator prints higher highs.
As a result, the AUD/USD bulls should wait for a confirmation of the latest bullish trend. In doing so, the horizontal area comprising multiple highs marked since June 2022, near 0.7140 will be the key to watch.
Following that, a run-up towards the June 2022 high near 0.7285 can be expected. It’s worth noting that the 0.7200 round figure may act as an intermediate halt during the likely run-up.
Alternatively, pullback moves need to conquer the 61.8% Fibonacci retracement level, also known as the ‘golden ratio’, around 0.7090, to tease the AUD/USD bears.
Even so, the previous weekly high near 0.7065, could act as the additional downside filter before convincing the sellers to attack the 0.7000 psychological magnet.
AUD/USD: Daily chart
Trend: Pullback expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
