AUD/USD Price Forecast: Poised to test multi-year top near 0.7270-0.7275 amid bullish setup
The AUD/USD pair holds steady above the 0.7200 mark through the Asian session on Tuesday, consolidating its recent strong move up to its highest level since May 14 touched the previous day. Meanwhile, the fundamental backdrop and the technical setup favor bullish traders, suggesting that the path of least resistance for spot prices remains to the upside.
Expectations for another interest rate hike by the Reserve Bank of Australia (RBA) later this month continue to underpin the Australian Dollar (AUD). The US Dollar (USD), on the other hand, attracts some follow-through selling amid a broadly rallying Japanese Yen (JPY) and turns out to be another factor acting as a tailwind for the AUD/USD pair. Traders, however, refrain from placing fresh directional bets and keenly await this week's release of the latest US inflation figures.
From a technical perspective, the recent close above the 0.7200 mark comes on top of a strong rally from the very important 200-day Simple Moving Average (SMA), tested in June, and validates the near-term constructive outlook. Furthermore, momentum indicators stay supportive, with the Relative Strength Index (RSI) hovering in bullish territory just shy of overbought and the Moving Average Convergence Divergence (MACD) line retaining a small positive spread.
This, in turn, hints that the upside pressure is firm but increasingly mature. Hence, any corrective pullback towards the 0.7145 immediate support is more likely to be bought into and remain limited. A convincing break below, however, might prompt some technical selling and drag the AUD/USD pair below the 0.7100 mark. However, the 200-day SMA around 0.6992 stands out as the key medium-term reference support. As long as spot prices hold above this longer-term gauge, the broader bias remains skewed to further gains even if near-term consolidation or corrective swings emerge.
On the top side, the multi-year peak, at 0.7272, is the next notable resistance, and a daily close above this hurdle would open the way for further gains.
AUD/USD daily chart
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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