AUD/USD Forecast: Bulls Target 0.7200 as RSI Approaches Overbought

AUD/USD extended its strength during Friday trading, currently hovering around 0.71703 after earlier touching its highest level since June 3. The Australian dollar outperformed all major counterparts during the session, becoming the focus of the forex market.

**Bullish momentum builds, RSI nears overbought**

The daily chart shows the pair maintaining its trajectory within an ascending channel, holding firmly above key moving averages, with the overall uptrend well supported. The 14-day Relative Strength Index (RSI) is approaching overbought territory, indicating solid upward momentum that has yet to become overextended. As long as the pair holds above moving average support, buyers are expected to maintain control in the near term. Market sentiment suggests bulls are targeting the 0.7200 psychological level, which roughly aligns with the lower boundary of the ascending channel, marking a key near-term resistance.

**Breakout could pave way for multi-month highs**

A successful break above 0.7200 would open the door for further upside. According to technical analysis, the next target points to the 0.7277 level, a high last seen on May 6, which represents the highest point since June 2022. A decisive move beyond that could see the pair testing the upper boundary of the ascending channel around 0.7460. However, with the RSI already near overbought levels, the possibility of a short-term pullback or consolidation cannot be ruled out.

**Downside support watched at moving averages**

On the downside, initial support lies at the 9-day Exponential Moving Average (EMA) at 0.7214, followed closely by the 0.7200 handle. Should the pair retreat and break below these levels, the 50-day moving average at 0.7096 would come into focus. Analysts note that a loss of the medium-term moving average could signal a bearish shift, potentially exposing the pair to deeper correction pressure.