AUD/USD Forex Technical Analysis – October 3, 2014 Forecast

Additional short-covering helped drive the AUD/USD higher on Thursday. The price action makes .8662 a new minor bottom. A higher-high today will turn this price into a main bottom.

The support is layered today. From the top down, potential support levels are a slow-moving uptrending angle from the .8659 bottom at .8770, this week’s low at .8662 and the January 24 bottom, and low for the year at .8662.

Breaking .8659 will be a sign of weakness, but crossing over to the bearish side of a downtrending angle at .8601 could lead to an acceleration to the downside.

If all the support points fail today then look for an eventual break into the 50% level created by the October 27, 2008 bottom at .6008 and the July 27. 2011 top at 1.1080. This level is at .8544.

Holding above .8770 will indicate that buyers are coming in to support the rally. This could create enough upside momentum to test the next uptrending angle at .8884.

Breaking out over .8884 will put the market in a position to challenge the next major downtrending angle at .9001.

The short-term range is .9401 to .8662. If there is a full retracement of this range then look for a rally into the retracement zone at .9032 to .9120. Since the main trend is down on the daily chart, short-sellers are likely to show up in this zone to refresh their positions.

The tone of the market today will be determined by trader reaction to .8770.