AUD/USD's rally hit a new short-term high and further gains are likely after an upside surprise to Australian GDP boosted the country's government yields and bolstered expectations the RBA's next rate move will be up.
Bulls are set to tackle resistance in the 0.7683/0.7703 zone where the April 23 high, 38.2 Fib of 0.8136-0.7413 and the daily cloud top reside.
A break of that zone seems probable as RSIs rise to provide bulls a tailwind with no divergence and copper prices break higher from their recent consolidation phase.
The bullish scenario does face Fed risk though. If the Fed takes a more aggressive stance going forward, U.S. yields should rally sharply and AU-U.S. yield differentials will move further in the greenback's favor.
Should bulls clear the 0.7683/0.7703 zone, stops likely get run and shorts will be squeezed hard.
A test of the 200-Day SMA and April's 0.7813 high are then likely.
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