My previous signal on 28th May was not triggered, as there were no bullish bounces at either of the support levels when they were reached that day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades may only be taken prior to 5pm Tokyo time Thursday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6665, $0.6696, or $0.6737.
- 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 $0.6614 or $0.6587.
- 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.
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AUD/USD Analysis
I wrote in my previous forecast one week ago that the AUD/USD currency pair was turning more bullish, but that any advance was likely to be halted by the resistance level at $0.6682. I also saw potential in bounces from support levels.
This was not a great call as the bullish bounce which did occur took place below the two support levels which were reached.
The technical picture has become a bit different. We are now seeing price action which suggests a bearish head and shoulders chart pattern is completing its final leg off the resistance level at $0.6665, suggesting this is going to be a pivotal level today. However, we also see fresh support emerging at $0.6654.
If the price continues to trade below $0.6654, that will be a bearish sign. If the neckline at about $0.6630 breaks down, that will be a very solid bearish signal.
If the price turns bullish and gets established above $0.6665, that will be a bullish sign.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time, followed by ISM Services PMI at 3pm.
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