AUD/USD Forex Technical Analysis – October 9, 2018 Forecast

The Australian Dollar is trading lower shortly before the U.S. opening. Early in the session, the Aussie was supported by China’s move to stimulate the economy by injecting stimulus into the financial system. However, sellers regained control after the U.S. 10-year and 30-year Treasury yields hit multi-year highs.

The longer-term trend remains bearish, but we may be ripe for a short-covering rally. However, this isn’t a guarantee, no matter how low your oversold oscillator goes. This is why I prefer to watch the actual price action rather than a smoothed indicator or oscillator.

At 0927 GMT, the AUD/USD is trading .7071, down 0.0008 or -0.11%.

The price action will show the turn in the market before the oscillator, which makes it a lagging indicator.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The AUD/USD is far from changing the main trend to up, but it is in the window of time for a closing price reversal bottom. However, it needs to take out .7042 then close higher in order to accomplish that. A trade through .7042 will signal a resumption of the downtrend with the next target the February 9, 2016 main bottom at .6973.

The minor trend is also down. Today’s price action made .7042 a new main bottom.

The new minor range is .7042 to .7094. Its 50% level or pivot at .7068 is currently being tested. Trader reaction to this level will let us know if counter-trend buyers are coming in to produce a minor secondary higher bottom.

If a new main range forms between .7314 and .7042 then its retracement zone at .7178 to .7210 will become the primary upside target.

Daily Technical Forecast

Based on the current price at .7070, the direction of the AUD/USD the rest of the day is likely to be determined by trader reaction to the pivot at .7068.

A sustained move over .7068 will indicate the presence of counter-trend buyers. If this creates enough upside momentum, then look for buyers to make a run at .7094. This is a potential trigger point for an acceleration into the downtrending Gann angle at .7134.

A sustained move under .7068 will signal the presence of sellers. If this move can generate some downside momentum then look for sellers to make a run at .7042. This is a potential trigger point for an acceleration to the downside with .6973 a potential target.