AUD/USD - Bearish move following a Doji candle, Is the rally over?
|The AUD/USD pair formed a classic Doji candle on Thursday, which indicates indecision in the markets. The two way action and a flat day end close (Doji) on Thursday are being followed by a bearish move this Friday morning in Asia.
As of writing, the spot was down 0.40% at 0.7925.
The bearish follow through to Thursday’s Doji candle could be an indication that the spot may have found a top, although yield differential still remains in favor of the Aussie dollar.
The spread or the difference between the Aussie-US 10-year yield currently stands at 0.473; the highest since November. The spread hit a high of 0.498 earlier this week. Thus, the current decline in the AUD/USD could be a technical pullback and may find fresh takers.
AUD/USD Technical Outlook
Jim Langlands from FX Charts sees AUD/USD stuck in a range over the 24-hour period. He writes, "The momentum indicators are now mixed and a session of consolidation, within Thursday’s range would not really surprise although the RBAs Debelle will be speaking today and may attempt to talk the Aud lower. A move back to the 0.7988 high could then see a run towards 0.8000 and then to 0.8015 although I don’t think we are going there today. Minor support now arrives at 0.7935 and at 0.7920 would find stronger bids at 0.7900 and then again at 0.7875 and at 0.7840 although it seems unlikely to be seen down here today."
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