AUD/USD Price Analysis: Breakout of a Bull Flag demands a re-test to near 0.7550

• Aussie bulls are firmer as the RSI (14) has shifted into a bullish range of 60.00-80.00.
• A re-test of the bullish flag formation will be a bargain buy for the market participants.
• Advancing 20- and 50-EMAs add to the upside filters.

The AUD/USD pair has had a mammoth upward movement after breaking above the April 4 high of 0.7557, which has driven the pair northward, with the asset printing a new nine-month high of 0.7662 on Wednesday. After reaching a low of 0.7165 in March, the Aussie bulls have been in a bullish mode since that time. The pair has broken out of its consolidation phase, which had been confined to a range of 0.7455-0.7541 at the time of the breakout.

On a four-hour time frame, the AUD/USD is forming a bullish flag pattern, which signifies a period of back and forth movement after a strong run to the north and might herald the start of a new impulsive wave if consolidation fails to break out forcefully in the near term. Typically, a consolidation phase is characterized by the placement of bids by investors who did not participate in the first surge and by the placement of bids by investors who prefer to join an auction after a positive bias has taken hold.

The climbing 20- and 50-period Exponential Moving Averages (EMAs) at 0.7550 and 0.7514, respectively, contribute to the upward filtering of the market.

The Relative Strength Index (14) has switched into a bullish area of 60.00-80.00 from a bearish range of 40.00-60.00, indicating that the stock market is poised to make a stronger upward move in the near future.

A re-test of the upper boundary bullish flag at 0.7541 will attract strong bids from investors, propelling the pair towards Wednesday's high of 0.7662, followed by the 11 June 2021 high of 0.7776, which is the highest point in the pair's history.

The dollar bulls, on the other hand, may recover power if the asset falls below the March 29 low of 0.7455, which would cause the asset to move towards the March 10 high of 0.7369. If the latter is breached, the asset would be exposed to more decline, maybe reaching the round level support around 0.7300.

AUD/USD four-hour chart