The currency market has been pretty volatile of late, but AUD/USD has been textbook this week. Now, there was a slightly dovish RBA meeting, but a better than expected Q4 GDP took the spot light (0.6% vs. 0.5% expectation, and previous Q GDP revised up to 1.1% from 0.9%). The market clearly traded on the GDP data and continues to prop up the AUD across the board. Australia Bureau of Statistics: GDP Release Bloomberg - Aussie Economy Exceeds Forecast as Households Open Wallets AUD/USD Daily Chart 3/3(click to enlarge) Bullish signals: From a technical perspective, AUD/USD was also very textbook in that it bounced off a rising support as well as the 100-, and 50-day simple moving average (SMAs). The fact that it bounced off the support showed that bulls are in control at the moment at least in the short/medium-term. The fact that price bounced off the SMAs is called a "slingshot" signal. This is essentially a bullish signal. Also, AUD/USD has crossed the 200-day SMA for the first time since September 2014. This signals a change in trend. We already know that the trend has become flat, but maybe it indicates that the trend is becoming bullish as well. Strong Resistance; Overshoot scenario: The thing is, bulls will face a tough challenge at 0.7380, which is the consolidation resistance going back to September 2015. In both a bullish and a flat scenario, we can expect some resistance around 0.7380-0.74. Given the current bullish momentum in the short-term, it is very conceivable that price will overshoot a little towards the August 2015 highs around 0.7435. Assess the Pullback: I would pay close attention to what happens next. If the market is indeed turning bullish it should probably hold above 0.71 on a pullback, Preferably it doesn't even reach there and possibly bounce off the 0.72-0.7240 area. That would give a strong bullish signal with upside at least towards the 0.7550-0.76 previous support area. Of course, in a bullish scenario, it is possible that the market does not even look back and goes straight to 0.7550-0.76 area before finding resistance. Bearish Scenario: If price fails to hold above 0.7240, I would stalk AUD/USD further. But if it falls below 0.71, I would shelve the bullish outlook. In this scenario, the 0.6830-0.69 support area would be back in sight. I would say that this scenario signals further downside risk because of a failed bullish attempt. The market would have "cleared out" the bulls and return to its prevailing bearish trend.