- AUD/USD turned positive for the fourth day in a row and soared to a 3-week high.
- A compelling advance, the 0.7175-0.7180 confluence hurdle favors bullish traders.
- The bulls could now aim to retake the 0.7300 level and test the 0.7315 zone, or 2022 highs.
The pair AUD/USD attracted some buying near the 0.7160 area on Thursday and turned positive for the fourth day in a row. The momentum carried the pair to a nearly three-week high during the middle of the European session, with the bulls now looking to build on the momentum beyond the 0.7200 level.
From a technical perspective, the latest leg up now appears to have confirmed a breakout to the upside through a descending trend line that extends from the 2022 high, around the 0.7315 area touched on Jan 13. The mentioned hurdle also coincided with the 61.8% Fibonacci level of the drop from 0.7315-0.6967.
With the technical indicators on the daily chart just starting to gain positive traction, the AUD/USD pair looks poised to prolong its recent rally from a two-year low. That said, the bulls are likely to wait for the US CPI report before positioning for any further appreciation moves.
The next relevant resistance is set near the 0.7225 area ahead of the 100-day SMA around 0.7250. Some follow-on buying has the potential to lift the AUD/USD pair past the 0.7280 intermediate resistance, towards the 0.7300 level and 0.7315 zone, or yearly highs.
On the other hand, the confluence resistance breakout point of 0.7180-0.7175 now seems to protect the immediate downside. Any further decline could attract some buying and remain capped near the 50% Fibonacci level, around the 0.7140 region, which if broken decisively will nullify the positive outlook.
The AUD/USD pair would turn vulnerable and accelerate the decline towards the 0.7100 round mark. The downward path could extend further and drag spot prices back towards a retest of the post-NFP low, around the 0.7050 region, support marked by the 23.6% Fibonacci level.
AUD/USD daily chart
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Additional technical levels
Source: Fx Street
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