My previous signal on 18th July was not triggered, as there were no bullish bounces at the key support levels which were reached that day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades may only be entered 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 $0.6514, $0.6585, or $0.6611.
- 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 $0.6465 or $0.6406.
- 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 almost two weeks ago that the AUD/USD currency pair was looking generally bearish, but had printed a bullish double bottom at $0.6721, and higher stairstep support at $0.6731, so the price looked likely to move higher over the short term.
This was not a good call.
The price has continued to move notably lower over the past couple of weeks, and even when we see some improvement in major stock indices, the Australian Dollar still refuses to make a significant rally, which seems to be an interesting uncoupling from the usual correlation of the Aussie with risky assets especially stocks. This points to a relative weakness in the Australian Dollar.
Australian CPI data released this morning came in as expected, but one component of it, trimmed CPI, was slightly lower than expected. This may be contributing a bit to the Aussie’s weakness.
The technical picture is clearly bearish, as the price has fallen with strong bearish momentum over recent days, just traded at a new 2-month low only a few hours ago, and has been the weakest major currency since today’s Tokyo open.
I will be happy to take a short trade from any bearish rejection we get today at the first touch of the nearby key resistance level at $0.6514.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of Unemployment Claims at 1:30pm London time.
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