AUDUSD retreated over the previous two days, following the bounce off the 32-month high of 0.8135. Looking on the medium-term timeframe, the pair has been in bullish phase since January 2016, supported by higher bottoms and higher peaks.
Despite the small retracement on the short-term chart, the price still endorses the sharp upward movement as it hit the 0.7500 strong psychological level and created consecutive winning weeks.
After this month’s strong moves, the expectation for the pair is for further profit taking and could drive the price until the 0.8300 handle if the price surpasses 0.8135. A penetration above the aforementioned obstacle could open the door for the next psychological level of 0.8500.
On the downside, if prices reverse lower, the next pause could be on the 0.8000 handle, which is near the 23.6% Fibonacci retracement level of the up-leg from 0.7500 to 0.8135. Slightly below the Fibonacci mark, the mid-level of the Bollinger Band holds at 0.7970, at the time of writing. Clearly those levels, the price could fall until the 38.2% Fibonacci mark at 0.7900.
In addition, the RSI indicator is still holding in the overbought area and is pointing to the upside. However, there is also the case of a bearish scenario as the upswing may be running out of steam and the risk of a near-term correction is high. The MACD oscillator is still standing in the positive territory above the trigger line but is moving with weaker momentum than before.
