The uptrend continues to new highs for August

• AUD/USD continues to rise in line with the dominant uptrend.
• The RSI however shows a bearish divergence with price, warning of a possible pullback.

AUD/USD is extending its rally and making higher highs as it continues the uptrend started in early August.

The pair hit a new monthly high of 0.6813 on Wednesday. Although it has since pulled back, it remains in an established uptrend which, given that “the trend is your friend”, is expected to widen.

AUD/USD 4 Hour Chart

AUD/USD broke the key high of 0.6799 on July 11 and is now setting its sights on the next target at 0.6870, the high since December 2023. A break above 0.6813 would provide bullish confirmation.

The Relative Strength Index (RSI) momentum indicator shows a bearish divergence with price. The new monthly price high reached on Wednesday was not accompanied by a corresponding new RSI high, for example. This shows downward momentum, which is a bearish sign and could infer a deeper correction on the horizon.

Price levels at 0.6755 and 0.6639, however, would be expected to provide support for any pullback and entry points for further gains as the dominant uptrend is likely to resume.