The Australian dollar has made three strong pushes to the upside over the past three days after the RBA rate decision and better-than-expected employment data. Short-term signals are flashing some overbought signals but the move higher is generating bullish signals.
We can now see two clear double-bottom formations. One at 0.8062 adn one at 0.8314. In today’s trading we broke above downtrend resistance and AUD/USD is now squarely targetting resistance at 0.8861.
We feel as though we are late to the Australian dollar bullish camp but we can’t fight this chart. Some measure of consolidation is likely in the coming day but we will be eager to buy any weakness with an initial target of 0.8850 followed by a test of 0.9000 or the 200-day moving average.
On hourly charts, we have moved into highly overbought territory and that gives us some optimism that we will imminently see a pullback. On the daily chart, however, the RSI is under 60 and still has a great deal to run before we get into overbought territory.