My previous signal on 15th December was not triggered as there was no bullish price action when any of the support levels were first reached.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken prior to 5pm Tokyo time Wednesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6675 or $0.6736.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6624, $0.6553, or $0.6486.
- 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 that the AUD/USD currency pair was presenting a quite bullish technical picture, with a bullish pennant flag pattern within the price chart, but the price was showing more hints that it will break down and make a bearish invalidation.
I was not certain about looking for a breakdown but in that sense it was a good call, as once the price broke below the lower trend line of the flag, it fell sharply.
The price is falling strongly right now due mostly to weakness in the Australian Dollar caused by the release of the Reserve Bank of Australia’s recent meeting minutes a few hours ago, which showed that the RBA considered not hiking last month. This has triggered selling even though the analyst consensus forecast remains two further 0.25% rate hikes during the course of 2023.
The US Dollar is also getting bid at least a little, so overall we are seeing good downwards movement in the price.
This move lower has broken through one support level quite easily at $0.6675, and the price looks likely to reach the next level at $0.6624 during the coming hours. However, I am not certain that the price will manage to get established below that second lower support level, although I am not interested in taking any long trades here today.
The best approach today in this currency pair will probably be to go short on a low time frame and hope to exit with a profit at $0.6625.
There is nothing of high importance due today concerning either the AUD or the USD.
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