AUD/USD Price Analysis: Looks to regain 0.7400 amid bullish technical setup

• AUD/USD’s path of least resistance appears north.
• The spot confirmed a bull pennant on 1D on Tuesday.
• Daily RSI has flattened just below the overbought territory.

AUD/USD renews two-month highs at 0.7375, shrugging-off a big miss on the Australian Q3 Private Capital Expenditure data, as the latest leg down in the US dollar underpins.

The greenback was sold-off into renewed concerns about the post-pandemic US economic recovery, reinforced by the jump in the weekly Initial Jobless Claims, which negated the sharp rebound in the GDP for the third quarter. Also, rising covid cases in the US weighed on the dollar.

From a technical perspective, the path of least resistance appears to the upside, as the price has charted a bull pennant breakout on the daily chart last Tuesday.

The upside momentum is also backed by the 14-day Relative Strength Index (RSI), trending well above 50.00, with scope for further upside, as it remains below the overbought territory.

The bulls now await a sustained break above the 0.7400 psychological barrier to challenge the yearly highs of 0.7416.

Further north, a test of the 0.7450 barrier will come into the picture.

To the downside, the daily low of 0.7357 could halt the pullback, below which the 0.7300 round number will get tested. At that level, the pattern resistance now support coincides.

AUD/USD: Daily chart

AUD/USD: Additional levels