• AUDUSD hits a fresh five-month peak on Thursday

• But oscillators have been in overbought levels for several sessions

• Can the rally resume or are we heading for a pullback?

AUDUSD has been staging a solid recovery following its 2023 bottom of 0.6271 in October, generating a clear structure of consecutive higher highs. However, the risk of an impending correction is more than evident as both the RSI and stochastics have been within their overbought areas for the past few sessions.

If the pair manages to resume its short-term uptrend, immediate resistance could be found at the double top of 0.6898 registered this summer. Jumping above that zone, the price might encounter strong resistance at 0.7030. Should that barricade also fail, the spotlight could turn to the 2023 peak of 0.7157.

On the flipside, in case of a pullback, the previous resistance of 0.6817 could now serve as initial support. A violation of that territory could open the door for the 0.6689 hurdle. Further retreats might then cease at the April support of 0.6573, which overlaps with the 200-day simple moving average (SMA).

Overall, AUDUSD has been in a recovery mode for the past few months, but the short-term oscillators are starting to warn of an overstretched advance. Meanwhile, the ascending 50-day SMA is closing the gap with the 200-day SMA, where a potential golden cross could add more fuel to the short-term rally.