AUD/USD Price Forecast: Consolidates around 0.7200; bullish potential seems intact

The AUD/USD pair holds steady around the 0.7200 mark at the start of a new week and remains close to its highest level since mid-May, touched on Friday.

The Australian Dollar (AUD) continues to be underpinned by rising bets for a rate hike by the Reserve Bank of Australia (RBA) in September, bolstered by stronger-than-expected economic growth and persistent domestic inflation. The US Dollar (USD), on the other hand, struggles to capitalize on the upbeat US Nonfarm Payrolls (NFP)-led gains as traders opt to wait for the release of the US inflation figures later this week. However, escalating US-Iran tensions act as a tailwind for the Greenback, capping the upside for the AUD/USD pair.

Spot prices have now found acceptance above the 78.6% Fibonacci retracement level of the May-June downfall. This comes on top of the recent strong move up from the vicinity of the 200-day Simple Moving Average (SMA) and suggests that the path of least resistance for the AUD/USD pair remains to the upside. Moreover, a firm Relative Strength Index (RSI) around 66 and a mildly positive Moving Average Convergence Divergence (MACD) histogram suggest buyers retain control, though conditions are edging toward overbought.

Meanwhile, a multi-year peak, at 0.7272, is the next notable resistance, and a daily close above this hurdle would open the way for further gains. On the downside, initial support is seen at the 78.6% Fibo. retracement at 0.7186, which, if broken, would signal fading upside momentum. The AUD/USD pair might then decline to the 61.8% level at 0.7118 and the 50% retracement near 0.7070, with deeper cushions at 0.7023 and the rising 200-day SMA at 0.6989.

AUD/USD daily chart