- The pair continued gaining traction on Monday and climbed to over one-month tops.
- The momentum lifted the pair further beyond 100-DMA for the first time since July 23.
- Overbought conditions on hourly charts seemed to be the only factor capping gains.
The AUD/USD pair gained some follow-through traction on Monday and added to its recent goodish recovery move from multi-year lows set earlier this month. The positive momentum beyond 100-day SMA – for the first time since July 23 – lifted the pair to over one-month tops.
The pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band around the 0.6880-90 previous congestion zone, which coincides with 50% Fibonacci level of the 0.7082-0.6671 downfall and should now act as a key pivotal point.
Meanwhile, bullish technical indicators on the daily chart support prospects for additional gains, albeit slightly overbought conditions on hourly charts seemed to be the only factor holding investors from placing fresh bullish bets and capping further gains, at least for the time being.
Hence, it will be prudent to wait for a strong follow-through buying beyond the 0.6900 handle before traders start positioning for any further near-term appreciating move towards testing the next hurdle marked by 61.8% Fibo. level resistance – around the 0.6925 region.
On the flip side, 100-DMA resistance breakpoint, around the 0.6860 region, now seems to protect the immediate downside and is closely followed by 38.2% Fibo. support near the 0.6830-25 area, which if broken might negate the constructive set-up and prompt some fresh technical selling.
AUD/USD daily chart