AUD/USD Price Analysis: Bull Flag Breakout Requires a Retest to Near 0.7550

• The Australian bulls have gained strength as the RSI (14) has moved into a bullish zone of 60.00-80.00.
  

• A re-test of the bullish flag formation will present market participants with an opportunity to buy at a discount.

• The advance of the 20- and 50-EMAs bolsters the upside filters.

The AUD/USD pair has seen a meteoric rise after breaching the April 4 high of 0.7557, which has pushed the pair north, with the asset printing a new nine-month high of 0.7662 on Wednesday. Aussie bulls have been optimistic since March's lows of 0.7165. The pair has broken out of its consolidation phase, which was contained inside the range 0.7455-0.7541.

On a four-hour chart, AUD/USD is producing a bullish flag pattern, which indicates sideways movement following a strong run to the north and indicates the possibility of a new impulsive wave if consolidation breaks out firmly. Typically, a consolidation period is characterized by the placement of bids by investors who did not participate in the early surge and by those investors who choose to enter an auction after a bullish bias develops.

The increasing 20- and 50-period Exponential Moving Averages (EMAs) at 0.7550 and 0.7514, respectively, amplify the upside filters.

Meanwhile, the Relative Strength Index RSI (14) has shifted from 40.00-60.00 to a bullish range of 60.00-80.00, indicating a firmer upward advance in the near term.

A retest of the bullish upper boundary flag at 0.7541 will attract large buys from investors, propelling the pair toward Wednesday's high of 0.7662, followed by the 11 June 2021 high of 0.7776.

The greenback bulls, on the other hand, can regain power if the asset falls below the March 29 low of 0.7455, dragging it towards the March 10 high of 0.7369. If the latter is breached, the asset will continue to fall towards the round level support at 0.7300.

Four-Hour AUD/USD Chart