AUD/USD trims gains and drops toward 0.7700

AUD/USD   is up for the day on the back of a weak US dollar but during the last hours, it moved off daily highs trimming gains and sowing doubts about the strength of the rally.

The pair peaked earlier at 0.7755, hitting the highest level since April 27 and then it started to pullback. Recently dropped to 0.7708 and it was trading at 0.7710/15, up 0.55% for the day. The Aussie is rising for the third day in a row versus the US dollar.

Above important level

If the AUD/USD manages to hold above the 0.7680 - 0.7695 area it could gain support for an extension of the rally. The mentioned area capped the upside since May and a consolidation on top could open the doors for a test of 0.7800 first and then to 0.7830/40 (2016 highs).

If it falls below 0.7680, the bullish momentum could be reduced significantly but on a wider perspective, the upside bias would remain intact as long as the price holds above 0.7550, where an uptrend line stands.