AUD/USD rose to an 18-month high on Tuesday after 0.7245/50 resistance broke with the help of early equity and commodity gains, along with a bounce in AUD/JPY, but its hasty retreat from the peak indicates growing risk of a correction.
AUD/USD's pullback from the highs formed a daily inverted hammer candle and the daily RSI, while still rising, did not confirm the aussie's 18-month high.
The U.S. dollar side of the equation could also soon factor into an AUD/USD correction.
The U.S. dollar index =USD is nearing the May 2018 monthly low as well as the 76.4% Fibo retracement of the 2018-2020 rally.
That Fibo is often a retracement level where reversals occur.
AUD/USD longs will likely need the dollar to break below those supports, equities to extend their rallies and new highs in copper and iron-ore if they expect tests of 0.7285/95 and 0.7395/0.7400 resistance zones.
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