AUD/USD Forex Technical Analysis – November 26, 2015 Forecast
The AUD/USD posted a potentially bearish closing price reversal top on Wednesday, signaling a temporary halt to the current uptrend. It’s temporary because it typically leads to a 2 to 3 day correction. It’s going to take a little time to develop a proper top that will eventually lead to a change in trend to down.
A closing price reversal top often leads to a retracement of the last swing up. The last rally was .7068 to .7282. Therefore, the primary downside target of this first leg down is .7175 to .7150.
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Based on the close at .7251, the tone of the market today is likely to be determined by trader reaction to the uptrending angle at .7255.
A sustained move under .7255 will signal the presence of sellers. Taking out .7226 will confirm the closing price reversal top. This should lead to a test of a downtrending angle at .7135.
The angle at .7135 is the trigger point for an acceleration to the downside. Taking out this angle could fuel a fast break into the 50% target at .7175 then the Fibonacci target at .7150.
A sustained move over .7255 will indicate the presence of buyers. The first target is the reversal top at .7282. Taking out this level will negate the chart pattern and could trigger a further rally into a downtrending angle at .7216. The daily chart opens up over this level with the next target a downtrending angle at .7299. This is the last potential resistance angle before the .7381 main top.
Watch the price action and read the order flow initially at .7255 today. The second level to watch is .7226. This price is important because taking it out will confirm the closing price reversal top.
If there is enough downside momentum then look for a break into .7175 to .7150 over the next 2 to 3 days.