In the world of forex trading, the Australian Dollar (AUD) has been on a winning streak in recent weeks. Thanks to positive remarks from the Reserve Bank of Australia (RBA), a weaker US Dollar, increased risk appetite, and rising iron ore prices, the AUD has seen a significant uptrend.
Potential Correction Ahead, But Bullish Momentum Remains Strong
Despite the recent gains, the AUD is facing resistance near the 0.68 level, which marks the high for the year. The currency pair has failed to break above this level for the second time, forming an interim double-top pattern with the last seen price at 0.6780. While the bullish momentum on the daily chart remains intact, the Relative Strength Index (RSI) has eased from near overbought levels, signaling a potential corrective pullback in the near future.
Looking ahead, geopolitical risks could dampen market sentiment, with key support levels seen at 0.6730 (23.6% Fibonacci retracement level) and 0.6640/50 (38.2% Fibonacci retracement level and 50-day moving average). On the upside, resistance is expected at 0.6799 (double top), with a breakout potentially leading to a test of the 0.6870 levels as AUD bulls regain momentum.
Analysis:
The recent rally in the Australian Dollar has been driven by a combination of factors, including positive central bank remarks, a weaker US Dollar, and improving market sentiment. While the currency may face some resistance in the near term, the overall bullish momentum remains strong. Traders should keep an eye on key support and resistance levels to gauge potential entry and exit points in the AUD market.