- AUD/USD breaks out of the top of a range and rallies.
- It has reached an initial bullish target and there is a risk it could soon pull back.
AUD/USD breaks above its range highs and follows through to the upside on Friday.
It is in a short-term uptrend which given the principle that “the trend is your friend” is more likely to extend than not.
AUD/USD Daily Chart
The next target to the upside is 0.6988 (14 February ‘23 swing high), followed by 0.7156 in a bullish case (2 February ‘23 high).
The pair is not overbought according to the Relative Strength Index (RSI) momentum indicator and so has breadth for more upside.
AUD/USD has reached an initial upside target based on extrapolating the August rally from the base of the early September correction, higher by a 61.8% Fibonacci. This target lies at around 0.6115 and has already been surpassed. This could indicate the trend has no higher to go and the pair will pull back. There are no signs yet from price action that this is about to occur.