• AUD/USD picks up bids to print mild gains at monthly peak, up for the fifth consecutive day.
• Clear upside break of four-month-old previous resistance line, 200-EMA favors Aussie bulls.
• Overbought RSI conditions, 50% Fibonacci retracement prods further advances amid pre-Fed anxiety.

AUD/USD struggles to extend the latest upside momentum despite posting mild gains near 0.6770 amid the mid-Asian session on Wednesday.

In doing so, the Aussie pair defends the previous day’s upside break of a downward-sloping resistance line from February, now support, as well as the 200-day Exponential Moving Average (EMA). However, the market’s cautious mood ahead of the US Federal Reserve (Fed) announcements prods the bulls of late.

Also read: AUD/USD grinds higher past 0.6750 amid pre-Fed anxiety despite softer US inflation

It should be noted that the overbought RSI conditions and the 50% Fibonacci retracement level of the quote’s February-May downside, near 0.6810, quickly followed by the previous monthly peak of around 0.6820, also challenge the AUD/USD pair’s upside.

Hence, the Aussie pair remains unimportant for momentum traders till it trades between the resistance-turned-support and the previous monthly high, respectively around 0.6730 and 0.6820.

In a case where the Fed matches market forecasts and offers a hawkish halt, the AUD/USD can break the 0.6730 support, which in turn will open doors for the quote’s south-run towards the 23.6% Fibonacci retracement level, near 0.6620.

Meanwhile, the US central bank’s inability to please the policy hawks, mainly due to the recently downbeat US inflation, can propel the AUD/USD price past the 0.6820 hurdle. The same will allow the bulls to aim for the mid-February highs of near 0.7030.

However, the 61.8% Fibonacci retracement level surrounding 0.6890, also known as the golden ratio, will precede the 0.7000 psychological magnet to check the AUD/USD bulls on their way to the north.

AUD/USD: Daily chart

Trend: Pullback expected