The AUD/USD pair halted its three-day winning streak on Tuesday, trading around 0.6730 during European trading hours. Technical analysis of the daily chart shows the pair moving within an ascending channel pattern, signaling a strengthening bullish bias.
The 14-day Relative Strength Index (RSI) is nearing the 70 level, which typically signals an overbought condition. If the RSI reaches this threshold, it could indicate that a market correction may be imminent.
In addition, the daily chart reveals that the 9-day Exponential Moving Average (EMA) has crossed above the 50-day EMA, suggesting that short-term price momentum is outpacing the longer-term trend. This crossover supports a short-term bullish outlook for the AUD/USD pair.
On the upside, the pair could aim for the region around its seven-month high of 0.6798, last reached on July 11. Further resistance is seen near the upper boundary of the ascending channel at approximately 0.6820.
Conversely, on the downside, the pair may find support at the lower boundary of the ascending channel, which aligns with the nine-day EMA at around 0.6648. The next support level is located at the 50-day EMA at 0.6624.
A break below the 50-day EMA could diminish the bullish bias, potentially pushing the pair down to test the throwback level at 0.6575. Should this level fail to hold, the next key support lies at 0.6470.
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