My previous signal on 5th June produced a nicely profitable short trade from the bearish reversal off the resistance level which I had identified at $0.6696.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be entered before 5pm Tokyo time Friday.
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6657, $0.6671, or $0.6696.
- 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 $0.6622, $0.6609, or $0.6584.
- 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.
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AUD/USD Analysis
I wrote in my previous forecast on 5th June that the AUD/USD currency pair was threatening to complete a bearish head and shoulders chart pattern off the resistance level at $0.6665. I thought that the price getting established above that level would be a bullish sign, however I was only right about that for a few hours and about 30 pips, so it was not such a great call.
The technical picture is simply a continuation of the wide consolidation pattern which we have seen continuing over the past 3 weeks, with a high at about $0.6700 and a low at about $0.6575.
With such a strong pattern building over several weeks, and major data released yesterday concerning this pair, it is hard to see a convincing case for a breakout from this range, so the best approach will probably be to play a continuation of this range consolidation.
As we are much closer to the top than the bottom of this range, short trades targeting $0.6575 from failed tests of resistance levels look to be the best short trade entry signals worth following.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be releases of PPI and Unemployment Claims data at 1:30pm London time.
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