Bulls in control near multi-year tops, eyeing a move beyond 0.7800

AUD/USD gained strong positive traction for the second consecutive session on Wednesday.
The emergence of fresh selling around the USD was seen fueling the ongoing strong move up.
RSI on the daily chart is flashing overbought conditions and warrants some caution for bulls.

The AUD/USD pair added to the previous day’s strong positive move and continued scaling higher for the second consecutive session on Wednesday. The momentum pushed the pair to fresh 33-month tops, with bulls now eyeing a move beyond the 0.7800 mark.

Increasing bets for a Democrat-led Senate and expectations for additional fiscal measures prompted some fresh selling around the US dollar. This, in turn, was seen as a key factor that provided a goodish lift to the AUD/USD pair and remained supportive.

Meanwhile, RSI on the daily chart is already flashing overbought conditions. This, along with a cautious mood around the equity markets, makes it prudent to wait for some near-term consolidation or a modest pullback before placing fresh bullish bets.

That said, the near-term bias remains tilted firmly in favour of bullish traders. Hence, any corrective slide might still be seen as a buying opportunity and remain limited near the 0.7740-35 horizontal resistance breakpoint, now turned support.

Any subsequent weakness might prompt some profit-taking and turn the pair vulnerable to break below the 0.7700 mark. The corrective slide could further get extended and drag the AUD/USD pair back towards weekly swing lows, around the 0.7640 region.

On the flip side, sustained move beyond the 0.7800 mark has the potential to lift the AUD/USD pair further towards the 0.7845-50 region. Bulls might then aim to reclaim the 0.7900 mark and challenge March 2018 swing highs, around the 0.7915 area.