AUD/USD Forex Technical Analysis – May 29, 2014 Forecast

The AUD/USD continued to consolidate between a pair of 50% levels at .9227 and .9191. In addition, the .9208 closing price reversal bottom as well as the .9201 main bottom continue to remain solid support. Other potential support areas today are an uptrending angle at .9205 and another 50% level at .9175.

Needless to day with the support so close together, it is going to take strong selling pressure to drive the Aussie lower, but once support levels begin to deteriorate, they should fall like dominos. Crossing to the bearish side of a downtrending angle from the .9408 top at .9188 today should be the trigger point for a sharp sell-off.

If traders continue to hold the market above the swing bottoms at .9208 and .9201 then there is a chance for a rally back to a downtrending angle at .9298 today. The best target zone for shorting is .9308 to .9332. If this market is topping then meeting fresh shorting pressure in this zone will form another lower top, setting up the market for further downside action.

The bigger picture appears bearish because of the two tops at .9460 and .9408, but this double-top hasn’t been confirmed yet. A trade through .9201 should be the catalyst behind a big break. In my opinion, the market is setting up for a 50% correction of the rally from the January bottom at .8659 to the April top at .9460.