AUDUSD has been consolidating since the end of April around the Ichimoku cloud and the 40-period simple moving average (SMA) currently at 0.6473. The price is trading within the 0.6378 – 0.6570 area with the stochastics approaching the overbought zone and the RSI touching the 50 level, suggesting some more gains in the 4-hour chart.
If prices continue to head higher, resistance should come from the 0.6520 barrier. A jump above it would reinforce the upside move and open the way towards the seven-week high of 0.6570, which has been a strong resistance in the past. A successful attempt above this hurdle would shift the neutral outlook to bullish, meeting the 0.6685 peak, achieved on March 9.
However, should a downside reversal take form, immediate support would likely come from the 0.6400 – 0.6378 zone. If there is a break below these levels, the market would switch to bearish, challenging the 23.6% Fibonacci retracement level of the upward wave from the 17-year low of 0.5506 to 0.6570 at 0.6315, with the next support coming from the 0.6215 – 0.6250 area.
Summarizing, the pair is still in a neutral tone and traders may wait for any break outside of the current range of 0.6378 – 0.6570.