AUD/USD reaches 10-month high at 0.6850 but RSI warns of reversal

AUD/USD climbed to a 10-month high of 0.6850, gaining 0.4% (28 pips) during Monday's session as the Australian dollar benefited from broad-based USD weakness and positive risk sentiment. The pair has rallied over 5% from August lows, supported by resilient Australian employment data and China's recent stimulus measures boosting commodity demand. However, technical indicators flash warning signals with the Relative Strength Index (RSI) reaching overbought territory above 70, suggesting potential exhaustion in the upward momentum. The 14-day RSI at 72.5 marks the highest reading since January, historically preceding pullbacks. Immediate resistance lies at 0.6875 (November 2023 high), while the first support level sits at 0.6800 (psychological level) followed by 0.6750 (50-day moving average). Traders should monitor Wednesday's Fed decision and Australian employment data Thursday for directional catalysts, with overbought conditions favoring profit-taking on rallies.