The AUD/USD pair has staged a major rally towards the 0.6600 level, as risk-on trading sentiment boosts commodity-related currencies.
AUD/USD analysis highlights that a bearish technical correction towards the 0.6250 level could take place at any time.
AUD/USD medium-term price trend
The Australian dollar has been steadily advancing against the greenback, with the pair recovering by over 1,000 points from the March 2020 low.
AUD/USD technical analysis shows that bulls may be about to test dual technical resistance on the daily time frame.
The daily time frame highlights that the pair’s 200-day moving average is located around the 0.6650 level.
The top of a large falling wedge pattern is also located around the 0.6650 level, making it a viable bullish target if the 0.6600 level is breached.
Given the size of the recent rally from the March low, it is entirely possible that traders may look to book profits around the 0.6650 level if the mentioned resistance areas hold.
AUD/USD short-term price trend
AUD/USD technical analysis highlights that the pair is bullish over the short term while price trades above the 0.6380 level.
The four-hour time frame shows that substantial amounts of bearish price divergence has been built during the rally towards the 0.6600 level.
According to the MACD indicator, bearish price divergence extends down towards the 0.6250 support region.
With this in mind, watch out for a coming drop in the AUD/USD pair once it reaches its overall medium-term bullish target.
AUD/USD technical summary
AUD/USD analysis suggests that a steep decline in the pair towards the 0.6250 level may be about to take place. A final rally towards the 0.6600 level cannot be discounted.