AUD/USD: interim double top – OCBC

The rise in the Australian dollar (AUD) in recent weeks has come amid dovish RBA remarks, a broadly weaker dollar, risk-on sentiment and higher iron ore prices, note OCBC FX strategists Frances Cheung and Christopher Wong.

Corrective withdrawal is not ruled out for now

“But growth met resistance at near 0.68 (highest for the year). The pair that fails to break above it a second time forms an intermediate double-top. Last seen at 0.6780. The bullish momentum on the daily chart is intact, but the RSI has declined due to overbought conditions. Corrective withdrawal is not ruled out for now.”

“Geopolitical risks may undermine sentiment Support seen at 0.6730 (23.6% fibo), 0.6640/50 levels (38.2% fibo retracement from 2023 low to 2024 high, 50 DMA). Resistance at 0.6799 (double top). Breakout should see AUD bulls regain momentum to test 0.6870 levels.”