AUD/USD Forex Technical Analysis – October 10, 2014 Forecast

The AUD/USD posted a potentially bearish closing price reversal top just shy of a major downtrending angle, setting up the market for further downside action.

The major downtrending resistance angle drops down to .8901. Taking out this angle will mean the closing price reversal top at .8897 has been negated, setting up a potential rally into the major 50% level at .9021.

Besides the reversal top, another bearish sign is the close below a steep uptrending angle at .8842 today.

The short-term range is .8642 to .8897. The pivot price of this range at .8796 is controlling the short-term direction of the market. Crossing to the bearish side of this pivot will not only put the market in a weak position, but also confirm the closing price reversal top.

This price action could trigger a break into the next angle at .8742. The next two uptrending angles come in at .8692 and .8667. If all of these angle fail then enough downside momentum should be created to take out the last main bottom at .8642.

The daily chart indicates there is plenty of room to the downside if .8642 fails with the major monthly 50% level at .8544 the next likely target.

The tone of the day will be determined by trader reaction to .8769. Look for the buying to increase on a move over .8842 and selling to increase under .8742.