AUD/USD has been caught in a slump since peaking at 0.8136 about a year ago, but its rebound from today's flash-crash low might signal a change. Even as global equity prices tumbled AUD/USD was able to stage a massive rally off the day's trend low of 0.6715.
Futures for Australian government bond yields show rates recovering from their lows, while rates for U.S. Treasuries, fed funds futures and eurodollars plunge.
yield spread widening from earlier in the day is now eroding, which is helping buoy AUD/USD.
The sharp rally from AUD/USD's low to positive territory now has bears concerned, with technicals flashing warning signs for shorts.
Bull hammers have formed on daily, weekly and monthly candles and daily RSI has diverged.
The 10-DMA, which has recently limited rallies, is under threat.
A break and close above that MA could bolster bull sentiment and target 0.7075/80 resistance.
A large short squeeze is likely if that zone is cleared.
Should Friday see U.S. jobs surprise to the downside and Powell lean dovish AUD/USD bulls might take over.
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