My previous signal on 25th January was not triggered as there was no bullish price action when the key support level at $0.7085 was reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken prior to 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 $0.7213, $0.7248, or $0.7275.
- Put the stop loss 1 pip above the local swing high.
- Adjust 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 run.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.7130 or $0.7063.
- Put the stop loss 1 pip below the local swing low.
- Adjust 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 run.
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 has become more bullish due to increased expectations of Australian rate hikes and the long-term bearish trend in the US Dollar.
I was looking for long trades and this was the right direction to be looking for, although my support levels did not set up that day.
The picture has become even more bullish, with the price making a bullish breakout to a new 9-month high and establishing a new higher support level at $0.7130. If the price holds up above this level today, the outlook is bullish.
The main price driver right now is yesterday’s policy release by the Federal Reserve. Although the 0.25% rate hike and statement language were exactly what had been widely expected, Powell’s subsequent press conference somehow had the effect of boosting risk-on sentiment, with markets now expecting no further hikes by the Fed, instead seeing cuts totalling 0.50% as likely in the second half of 2023. This triggered a selloff in the US Dollar, and this pair has benefited.
Although the US Dollar has been the main driver, the Australian Dollar, along with the Euro, is the strongest major currency right now.
For these reasons, I see a long trade from a bounce at the support level at $0.7130 as the best opportunity which might set up today. A strong bounce at $0.7085 would also be an attractive entry signal if it happens today.
The price has room to rise all the way to $0.7213.
There is nothing of high importance scheduled today regarding either the AUD or the USD.
Ready to trade our daily Forex signals? Here’s our list of good Australian Forex brokers.