AUDUSD edged sharply higher in the near-term timeframe following the rebound on the 0.7500 significant support level that started on December 12, 2017. The price hit the ascending trend line on the medium-term chart, which has been holding since January 2016 before the upside movement.
However, given that the latest run appears overstretched and having a look at the momentum indicators in the daily chart, a correction setback may take place before buyers decide to push further. The Relative Strength Index (RSI) is pointing south in the overbought zone, which is a signal of a downward retracement, whilst the Stochastic oscillator recorded a bearish crossover with its moving averages as the %K line has moved below the slow %D line and both lines are heading lower.
The price started the day with sharp bearish move and if the bears take control, then the expectation is a pressure to the downside until the 0.7730 support level, which is near the 20-day simple moving average at 0.7710.
On the flip side, if traders manage to overcome the 0.7895 strong resistance level, this could strengthen the upside momentum and push the price perhaps towards the next obstacle of 0.8830. However, going in the 4-hour chart, there is a resistance before 0.8830 at 0.7980 where the price could pause its ascent there.
Turning our attention in the medium-term timeframe, AUDUSD printed the fourth bullish week in a row and surged 4.7%, endorsing the scenario for further gains during the next weeks.
