- AUD / USD rose above a key resistance area around 0.7170 to the key 0.7180 zone, rising 0.8% on the day.
- The pair has been supported by technical buying, favorable moves in commodities, and recent aggressive language from the RBA.
- But short-term momentum indicators suggest that the rally is getting a bit overloaded.
The AUD/USD It has been extended on its recent winning streak in recent trading, with the rally accelerating as the pair broke a key resistance level around 0.7170. AUD / USD is now trading near the 0.7180 mark, rising around 0.8% on the day, and extending its gains on the week to more than 2.5%.
Recall that on Tuesday the pair broke above a long-term downtrend channel that had been suppressing price action since early November. An apparent extension of technical buying was seen on Wednesday, although the bulls have yet to bring the Aussie back within range of its 21-day moving average, which is currently just above 0.7200. Its strong rebound towards the end of the week. In the four-hour candles, the AUD / USD 14-period Relative Strength Index has quickly reversed from below 30 (oversold) last Friday to now above 70 (overbought). This can be taken as a profit-taking signal slowing down the current rally.
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