My previous signal on 1st July produced a profitable short trade from the bearish rejection of the resistance level identified at $0.6685.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades must be taken before 5pm Tokyo time Friday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6775 or $0.6877.
- 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 $0.6755, $0.6729, or $0.6721.
- 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 AUD/USD forecast on 1st July that the AUD/USD currency pair was threatening to make a bullish breakout beyond the resistance level at $0.6685 which was likely to be the day’s pivotal point.
This was a great call as it was the day’s pivotal point and the failure of bulls there provided a profitable short trade entry opportunity.
The technical picture has become more bullish here, driven by increasing risk-on sentiment and rallies in major stock market indices driving prices to new highs. More bullishness on rate cuts has caused the US Dollar to weaken and the risk-correlated commodity-linked Australian Dollar has benefitted accordingly.
Technically, the price chart shown below looks bullish, with new stairstep support levels which are producing a kind of handle chart pattern (as in the end of a cup and handle) which looks very bullish.
We see bulls now trying to hold up the price at $0.6755 which is new support. This is confluent with the big quarter-number at $0.6750. So if the price makes a bounce here, it is definitely a buying opportunity.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of CPI data and Unemployment Claims at 1:30pm London time.
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