My previous signal on 12th October produced a slightly profitable long trade from the bullish hammer candlestick which rejected the support level which I had identified at $0.6250.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken prior to 5pm Tokyo time Tuesday.
Short Trade Idea
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6520.
- 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 $0.6404, $0.6368, $0.6350, or $0.6324.
- 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.
AUD/USD Analysis
I wrote in my previous forecast that the AUD/USD currency pair was presenting a bearish technical picture, despite the short-term rise from $0.6250. I was looking for a short trade from the resistance level at $0.6342, which was not reached that day.
I was correct over the longer-term, but not over the day, as the day’s best opportunity was another long trade from the bullish rejection of $0.6250, which was good for approximately 35 pips of profit.
The technical situation is choppy, with the upper limit of the dominant range a little way above $0.6500. The line of least resistance does seem to be upwards though, as there are four tightly packed support levels close by within approxiamtely 100 pips of the current price.
This suggests that if we get a worthwhile opportunity today in this currency pair, it will likely be a long trade from a bounce off one of these support levels. All of these nearby levels looks strong and likely to hold. The Chinese zero covid policy announcement has sent the price lower, but I do not see this as such strongly negative news that its going to send the price down breaking past several support levels.
The best aproach will likely be to look for long scalps off any such bounce from support, and then to monitor very carefully and conservatively on short time frames, as there is unlikely to be a lot of profit in it, so best to be ready for a nimble exit.
There is nothing of high importance scheduled today concerning either the AUD or the USD.
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