AUDUSD posts bullish doji after 10-day negative run

AUDUSD plunged to a fresh three-month low of 0.6736 on Tuesday, creating a bullish doji candle, which is suggesting a possible rebound in the market on the short-term timeframe.

The price is creating a pullback after a ten-day negative run, confirmed by the technical indicators. The stochastic oscillator is turning higher and the %K and the %D lines are posting a bullish crossover in the oversold zone. In addition, the RSI is pointing up marginally above the 30 level.

Significant advances could send prices towards the immediate resistance at the 0.6800 psychological mark, identified by the low on December 10, which is flirting with the lower surface of the Ichimoku cloud. Above this level, the upside move could take the pair until the 0.6850 barrier and the completed bearish crossover within the 20- and 40-period simple moving averages (SMAs) at 0.6878.

On the other side, a selling interest would open the door for the key support area 0.6710 – 0.6720, taken from the lows on October 10 and October 16 respectively. More losses could lead the price to the ten-and-a-half-year low of 0.6670, reached on October 1.

Concluding, after the recent bounce off the three-month low, AUDUSD could see some gains in the near term. However, a bullish trend would be created only if there is a daily close above the previous six-month high of 0.7030.