The AUD/USD currency pair has enjoyed a significant upward movement in recent trading sessions rallying from a low of 0.6827 to the current level of 0.7021. However, the pair appears to have found strong resistance around the 0.7020 level, which has halted its current rally.

The resistance zone around this level has remained firm for nearly two months it looks like it will continue to prevent the pair from advancing higher in the near future. This suggests that the AUD/USD could soon be facing bearish pressure.

AUD/USD Fundamentals Overview

From a fundamental perspective, the AUD/USD currency pair is trading at the back of a busy week that saw most economies post positive data while others like the US had mixed reports. 

Earlier in the day, Australia’s private sector credit grew by 3.6% YoY for May representing a decline from last year’s growth of 3.7%. The MoM growth was 0.2% unchanged from last year, but it missed the forecasted figure of 0.3%.

In the US personal spending was in line with expectations at 0.4% growth for May but fell from the previous period’s growth of 0.6%. Personal Income MoM beat expectations of 0.3% with 0.5%.

AUD/USD Technical Analysis (the 240-min Chart)

From a technical perspective, the AUD/USD currency pair appears to have reached overbought levels in the Relative Strength Indicator. This suggests that there could be a build-up of selling pressure in the coming days as the bulls begin to take profits.

Nonetheless, for those who remain optimistic, they could still target bullish profits at around 0.7050 in the short-term while the bears can look to pounce by targeting profits at 0.6997.

AUD/USD Technical Analysis (the Daily Chart)

In the daily chart, the AUD/USD currency pair appears to be trading within a descending wedge, which implies a bearish bias in the market sentiment. And after hitting a key resistance level recently, the pair appears more likely to pull back than break out of the wedge in the coming days.

The RSI shows that trading in the AUD/USD currency pair is approaching overbought levels from a long-term perspective. As such, while the bears will be more optimistic, the bulls still have something to aim for, up top, as illustrated in the daily chart.

In summary, the recent rally in the AUD/USD currency pair appears to have come to a stop as downward pressure continues to build up. The next few days will be interesting for traders.