Following this morning’s early break above the trend line at 0.6764, we saw a further bullish engulfing candle form and the pair push higher. This short-term activity has captured our interest resulting in the commodity-driven pair into our Chart of The Day.
Just this afternoon, the Aussie managed to break above the previous swing high at 0.68 and usually such a move would suggest the downtrend is over, and a new one has begun. However, the current RSI level (Relative Strength Index) is signalling the price has reached overbought territory pointing to a price reversal.
Given the longer-term picture remains bearish, it may be worth considering this bullish activity with a grain of salt. Should it continue, the next key area of resistance sits within the region of 0.6850
Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg
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