Uptrend proceeds to fresh highs for August

• AUD/USD continues rising in line with the dominant uptrend. 
• The RSI is showing bearish divergence with price, however, warning of a possible pull back.
   

AUD/USD extends its rally and makes higher highs as it continues the uptrend it began at the start of August. 

The pair reached a new monthly high of 0.6813 on Wednesday. Although it has pulled back since, it remains in an established uptrend which, given “the trend is your friend” is expected to extend.

AUD/USD 4-hour Chart

AUD/USD has broken above the key 0.6799 July 11 high, and now sets its sights on the next target at 0.6870, the December 2023 high. A break above 0.6813 would provide bullish confirmation. 

The Relative Strength Index (RSI) momentum indicator is showing bearish divergence with price. The new monthly high price reached on Wednesday was not accompanied by a corresponding new high in the RSI, for example. This shows waning momentum which is a bearish sign and could infer a deeper correction is on the horizon. 

The price levels at 0.6755 and 0.6639, however, would be expected to provide support to any pull backs and points of departure for fresh upswings as the dominant uptrend is likely to resume.