It continues to post green candlesticks as it pushes higher

• AUD/USD is rising higher towards the top of a long-term range.
• Momentum diverges sharply across price, suggesting a pullback risk.

AUD/USD continues to display green candlesticks as it steadily rises. The pair hit a new 2024 high of 0.6839 on Thursday, and while there is not much room left before it hits the long-term high at 0.6870, the trend is bullish in the short term, so it is very likely to continue above.

AUD/USD Daily Chart

The Aussie is showing a slight bearish divergence with the Relative Strength Index (RSI) momentum indicator (dashed red lines in the chart above). This happens when the price reaches a new high but the RSI fails. Disconfirmation is a bearish sign and indicates mild underlying weakness. It suggests that AUD/USD is at risk of a pullback.

If a correction develops, it is likely to find support around 0.6800 (July high), followed by 0.6736.

AUD/USD has been in a near-term uptrend since the 9/11 low and given that it is a tenet of technical analysis that “the trend is your friend”, the odds favor a continuation higher eventually – in despite bearish divergence with RSI.

A break above 0.6839 (September 19 and annual high) would confirm a continuation of the uptrend to a target at 0.6870 (December 2023 high).