- AUD/USD seems to have bottomed out at 0.7412.
- The pair is creating a dragon fly doji in the weekly chart.
The weaker-than-expected US inflation release helped the Aussie dollar post a positive follow-through to Wednesday’s doji candle (which showed indecision).
Thus, a bull doji reversal has been confirmed, meaning the sell-off from the high of 0.7813 has ended and the bulls have regained control, at least for the short-term.
Further, the weekly chart shows the pair is creating a dragon fly doji – a candlestick pattern that signals indecision and is often considered as a sign of reversal. When viewed against the backdrop of the recent sell-off from 0.7813, the dragon fly doji also indicates bearish exhaustion.
It remains to be seen if the AUD bulls are able to capitalize on the signs of reversal. As of writing, the spot is flat lined around 0.7528.
AUD/USD Technical Outlook
“Open above 0.7507 10 DMA suggests downtrend is in a consolidation phase”, Reuters FXBuzz analysts say, but momentum studies continue to edge lower, indicating bearish setup.
“0.7507 10 DMA & 0.7540 NY high initial support resistance” – Reuters FXBuzz
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