My previous signal last Monday was not triggered, as there was no bearish price action the first time the price reached the resistance level which I had identified at 0.6884 that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be taken before 5pm Tokyo time Friday.
Short Trade Idea
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6844 or 0.6884.
- Put the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.6797, 0.6784, or 0.6719.
- Put the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
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 last Monday that the AUD/USD currency pair was showing bearish momentum which could slow down or even reverse, however the odds were that nothing would change sentiment enough to prevent further gains by the US Dollar later. I was looking for a short trade from a bearish reversal following a bullish retracement to at least 0.6875.
I was wrong over the short term, with the price rising over the day. However just a few hours ago the price finally reached the support level at 0.6797 so I was correct over the longer term.
The Forex market has been dominated in recent hours by the US Dollar which has been advancing against every major currency. The Australian Dollar has been no exception. Yet the support level at 0.6797, which is very confluent with the round number at 0.6800, has been hit and has acted so far as a very strong support level. It may be that this level holds over the day despite the long-term bullish trend in the US Dollar.
The Dollar’s advance has been driven by market sentiment, but it is hard to see the current move as truly driven by anything, I think these are natural technical movements in the absence of any real news. In the absence of any truly major news items today, I think the price will regain some ground but is likely to not reach very high before falling again. Therefore, a short trade from a bearish reversal at 0.6844 which may set up later is likely to be today’s best opportunity.
Shorter-term traders may seek long scalps from further bullish bounces at 0.6800 or 0.6797 later.
Regarding the USD, there will be a release of ISM Manufacturing data at 3pm London time. There is nothing of high importance scheduled concerning the AUD.
Ready to trade our free currency signals? Here are the best Forex brokers to choose from.