The Australian Dollar bulls stepped in unexpectedly on Wednesday, as the safe-haven US Dollar, which measures its value against a basket of six major currencies, tumbled from its 93.00-60 objective, after posting a new 16 week high of 93.16.
Although market participants are expected to remain bullish on the greenback’s outlook, at least over the next few months, they are likely to consider this pullback as a pause to the broader bullish outlook.
On the other hand, the Aussie bulls left their mark after posting a bullish outside range day (engulfing Japanese candlestick) on Wednesday.
This, in terms, may keep the bullish path open until reaching the shores of the US$0.7480-90 region.
However, not to forget, we also require confirmation of the posted engulfing Japanese candlestick.
Simply put, an outside day pattern consists of two candlesticks and is easily recognizable in any timeframe chart pattern.
Confirmation from this bullish candlestick would be viewed from a New York close above US$0.7370-80.
Considering the daily chart, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator supports a negative signal but is attempting to correct a positive bias since the rebound.
Meanwhile, the Moving Average Convergence Divergence (MACD) holds a negative signal.
The Average Directional Movement Index (ADX) trend indicator supports the presence of a ‘toppy’ bearish trend.