AUDUSD rose to a high of 0.7987 on July 20 before steadying. The pause in the rally suggests that a temporary top is now in place as the market lost upside momentum. Looking at the 4-hour chart, the weakening in momentum is indicated by the RSI which fell after reaching overbought levels above 70.
The near-term bias has turned neutral for consolidation. Support is provided at 0.7890, which is the 23.6% Fibonacci retracement level of the rise from 0.7571 to 0.7987 (July 7 to July 20). Further support is provided by subsequent Fibonacci levels at 0.7830 and 0.7780.
The 20-day moving average was acting as a resistance level in recent days, capping AUDUSD around 0.7930. Prices are currently testing this level and have risen above it. Should prices continue to rise, this prior resistance level will turn to support and a further rise could target the July 20 high of 0.7987. From here, the uptrend will resume.
The positively aligned moving averages and the rising 50-day MA are supporting a bullish outlook in the short-term. There was a bullish crossover of the 20-day day with the 50-day MA on July 12.
There has been no confirmation of a trend reversal yet and the current consolidation pattern could be a temporary pause before the uptrend resumes. For now, the bias remains neutral on the 4-hour chart.
