AUDUSD has shot higher, breaking the 0.7900 key level and recording a fresh two-year high. However, the odds of a trend reversal are increasing in the short-term, as the pair is currently in under overbought conditions.
On a four-hour chart, the bias is bullish, as the Tenkan-Sen and the Kinjun-sen are positively sloping after the former crossed above the latter on July 10. Meanwhile, the MACD has turned from negative to positive and managed to rise above its signal line. Nevertheless, the RSI suggests that the pair might lose momentum as the oscillator itself has been fluctuating in an overbought territory since July 12.
If prices continue increasing, a possible resistance might emerge around the psychological level of 0.8000, which was tested repeatedly back in 2015. Further movements to the upside would meet the previous top of 0.8123, the highest mark recorded since May 2015.
Alternatively, if the pair moves downwards, the psychological key-level of 0.7900 could act as an immediate support, while further declines would target the area around the Tenkan-sen point of 0.7859. A violation of this point would open the way towards the key level of 0.7800 as a support.
