AUDNZD is on a strong uptrend, with price breaking above the key 1.0850 mark and surging close to 1.0950 before pulling back. Price is testing the 38.2% level but might still be able to make a larger pullback to the lower Fibs.

In particular, the 61.8% level lines up with a longer-term rising trend line around the 1.0840 area and the 100 SMA dynamic inflection point. If this is enough to draw buyers in, price could resume the climb to the swing high or higher.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse. The gap between the moving averages is even widening to reflect stronger bullish momentum.

Stochastic has yet to dip to the oversold region to signal exhaustion, but it looks like the oscillator is ready to bottom out to hint that buyers are eager to return. RSI has more room to head south before reflecting oversold conditions, so price could follow suit while sellers have some energy left.

Earlier in the week, New Zealand announced tax measures to limit the property price surge in the country, leading to declines for its currency. Risk-off flows likely contributed to the selloff as well, with traders increasingly worried about the surge in COVID-19 cases from the mutated strains of the virus.

Meanwhile, the Aussie could stay supported on account of gold prices gaining from risk aversion. Economic data from Australia has been mostly upbeat, although there are concerns that employment could take a hit once government aid measures expire.

There are no major reports due from the Australian economy for the rest of the week, leaving AUD to take cues from market sentiment or to act as a counter currency.