- AUD/USD created a classic "long-tailed" doji candle yesterday, signaling strong dip demand at the 100-day moving average (MA) line.
- That said, traders usually wait for a strong follow through, preferably a break above the high of the long-tailed doji.
- So, a move above 0.7179 (yesterday's high) may invite stronger buying pressure, leading to a move higher toward 0.7295 (Jan. 31 high).
- A convincing break above 0.7179 could happen later today if China's industrial production, retail sales, and Q1 GDP better estimate.
- In particular, a stronger than expected rebound in industrial production would add credence to upbeat PMI numbers released earlier this month and strengthen the narrative that the industrial cycle is on the verge of recovery.
- The AUD may revisit the previous day's low of 0.7139 if the China macro data disappoint expectations. That said, only a close below that level would confirm a bearish doji reversal.
- As of writing, the AUD/USD pair is trading at 0.7167, having hit a low of 0.7153.
Daily chart
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Trend: Bullish above 0.7179
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