My previous signal on 18th April were not triggered, as none of the key levels were reached that day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades may only be taken prior to 5pm Tokyo time Wednesday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6645, $0.6737, or $0.6754.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6590, $0.6546, or $0.6501.
- Place the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
AUD/USD Analysis
I wrote in my previous forecast three weeks ago that the AUD/USD currency pair was showing some bullish momentum which seemed to be stalling at $0.6456. I thought that this level was likely to be pivotal. This was a good, accurate call.
The technical picture now is more bullish, as we have seen the price rise here over the past three weeks. This is due party to a reversal against the US Dollar coming from an increasing expectation that the Fed will cut rates a bit earlier than was thought later this year, and from increasing risk-on sentiment which has boosted the Australian Dollar.
The RBA just announced it is keeping its Cash Rate at 4.35% after considering a hike, despite its fear of Australia tipping into a recession. However, this seems to have had little effect on the price of the Aussie.
The most dominant recent technical feature here is now the bearish double top which rejected the resistance level at $0.6645. This has sent the price down quite firmly to test the nearest support level at $0.6590.
If we get a bullish bounce here at $0.6590, I will be very tempted to take a long trade as it does look likely to be strong support. However, I would be very cautious about monitoring the trade and taking profit as I am not sure it would reach the logical resistance point at $0.6645.
There is nothing of high importance due today regarding either the AUD or the USD.
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