My previous signal last Thursday was not triggered as none of the key support or resistance levels were reached that day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades must be taken before 5pm Tokyo time Friday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6224 or $0.6299.
- 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.
- Take off 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 1H1 time frame H1H1H1 time frame immediately upon the next touch of $0.6166 or $0.6126.
- 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.
- Take off 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 last Thursday that the AUD/USD currency pair was
likely to fall from a retest of the resistance level at $0.6299 due to the long-term bearish trend, but this level was not reached.
The bearish trend has continued, just at a slower pace. The daily price chart below shows that the price has been contained within a bearish price channel for the past several months, and has recently reached new long-term lows.
The US Dollar is strong and is the main driver of this trend, but the Australian Dollar is also one of the weakest major currencies right now, as the Australian economy continues to look fragile as it threatens to tip into recession, making further rate cuts in the near future a certainty. The Australian government seems unlikely to pursue structural strengthening of economic fundamentals and will probably instead implement policies which will continue to weaken the Aussie Dollar. So, there are strong technical and fundamental reasons to expect this bearish trend to continue, but much will depend upon the US Dollar.
I will again look for a short trade today from a bearish retest of $0.6300 if we see a reversal when the level is touched.
One note of caution: the first trading days of a new calendar year can see strange and volatile price movement.
There is nothing of high importance due today concerning the AUD. Regarding the USD, there will be a release of Unemployment Claims at 1:30pm.
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