FX Empire

AUD/USD Forex Technical Analysis – Closing Price Reversal Bottom Confirmed on Trade Through .7860

James Hyerczyk
Updated

Following a prolonged move down in terms of price and time, the AUD/USD posted a potentially bullish closing price reversal bottom. While it may not be enough to change the trend to up according to the daily swing chart, it could lead to the start of a 2 to 3 counter-trend rally, or a 50% retracement of the last swing down.

The reversal was fueled by a combination of price and time. Typically, they begin following a 7 to 10 break or multiples there of like 14 to 20 days. Thursday’s trading session began with the AUD/USD down 14 days from the September 8 main top at .8124 and 6 days down from the September 20 main top at .8102.

The main range is the July 5 bottom at .7571 to the September 8 top at .8124. Its retracement zone is .7847 to .7782. Thursday’s closing price reversal bottom was formed at .7799, inside the retracement zone.

AUDUSD
Daily AUDUSD

Once again, this pattern does not mean the trend is getting ready to turn higher, but it could mean that the buying is greater than the selling at current price levels and that the AUD/USD is ripe for a short-term shift in momentum to up.

The new short-term range is .8102 to .7799. The closing price reversal bottom will be confirmed on a trade through .7860. If the breakout over this level begins to gain traction then its retracement zone at .7950 to .7986 will become the primary upside target.

AUDUSD Short-Term
Daily AUDUSD Short-Term

The direction of the AUD/USD early in the session is likely to be determined by trader reaction to .7860.

A sustained move under .7860 will signal the presence of sellers. This could lead to a sideways trade.

Taking out .7860 will indicate the presence of buyers. This could trigger the start of a 2 to 3 day rally with .7950 the next major objective.

This article was originally posted on FX Empire

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