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AUD/USD Forecast: RSI In Overbought Territory Might Favor A Mild Correction Ahead

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AUD/USD Forecast: RSI In Overbought Territory Might Favor A Mild Correction Ahead
  • The AUD/USD reaches a 30-month high above 0.7500.
  • RSI in overbought territory might favor a mild correction ahead.

The AUD/USD extended its march higher on Thursday and climbed above the 0.7500 level for the first time since June 2018, mainly driven by broad-based US dollar weakness and surging commodity prices. Additionally, a string of stronger-than-expected Australian data releases this week has also contributed to the rally.  By the end of the American session, the AUD/USD pair holds onto a 1.25% daily gain, hovering just a couple of pips below the multi-year high struck earlier at 0.7538.

While the short-term technical picture remains strongly bullish, the RSI has already reached overbought conditions, favoring a corrective move before another leg higher. In case of a setback, the 20-period SMA in the 4-hour chart at 0.7450 is the first support in line, followed by the 0.7400 psychological level. On the flip side, a decisive break above 0.7540 could pave the way towards the 0.7580 zone en-route to the next milestone at 0.7600.

Support levels: 0.7450 0.7400 0.7350 

Resistance levels: 0.7540 0.7580 0.7600

Image sourced from Pixabay

 

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