AUD/USD Price Analysis: Bulls flirt with September swing highs, around 0.7470-75 area
- AUD/USD gained strong positive traction on Tuesday amid a broad-based USD weakness.
- Slightly overbought conditions on hourly charts warrant some caution for bullish traders.
The USD selling bias picked up pace heading into the European session and pushed the AUD/USD pair back closer to September monthly swing highs, around the 0.7470-75 region in the last hour.
The resource-linked Australian dollar remained well supported by the recent widespread rally in commodity prices. This, along with the emergence of aggressive US dollar selling, assisted the AUD/USD pair to gain strong positive traction during the first half of the trading action on Tuesday.
The greenback was weighed down by the overnight pullback in the US Treasury bond yields and dismal US Industrial Production data, which fell by the most in seven months. Apart from this, a positive risk tone further undermined the safe-haven USD and benefitted the perceived riskier aussie.
Meanwhile, technical indicators on hourly charts are already flashing overbought conditions. Moreover, RSI (14) on the daily chart have moved on the verge of breaking about the 70 mark. This, in turn, warrants some caution for bulls and before positioning for any further appreciating move.
That said, some follow-through buying should pave the way for an extension of the recent strong positive move witnessed over the past four weeks or so. The momentum, however, could pause at higher levels and struggle to lift the AUD/USD pair further beyond the key 0.7500 psychological mark.
On the flip side, any meaningful pullback now seems to find decent support near the 0.7435 region. This is followed by the 0.7400 round-figure mark and the overnight swing lows, around the 0.7380-75 region, which should act as a strong near-term base for the AUD/USD pair.
The latter coincides with a short-term ascending trend-line support, which if broken will negate the positive bias and prompt some technical selling. The AUD/USD pair might then accelerate the fall towards the 0.7320-15 strong resistance breakpoint turned support en-route the 0.7300 mark.
AUD/USD daily chart
Technical levels to watch