AUD/USD's slide from 2018's high might be complete.
Price action from May 9 was the initial sign a base might be forming.
After setting a new low the pair closed up on the day, daily RSI diverged and a long-legged doji candle formed.
Today's U.S. CPI miss has sent the greenback and U.S. yields lower, both of which have driven AUD/USD above the 10-DSMA.
Upside follow through after yesterday's price action bolsters the view a bottom might be in. Reduced Fed hike expectations also reinforce the basing view as recently diverging paths of the RBA and Fed might converge slightly and lead AU-U.S. yield spreads to tighten.
Australian Q1 wage price index is due May 15 and April jobs data follows the next day, both of which will be key if AUD/USD is set to rally.
Upside data surprises, especially to wages, will confirm recent upbeat comments from RBA Governor Lowe that economic growth is likely to intensify while also allowing inflation to take another step towards the RBA's 2-3 percent target.
AUD/USD bulls shouldn't rest easy though.
A break of 0.7620/40 resistance is likely needed before bulls gain greater control.
chart: Click here