My previous signal on Wednesday last week was not triggered, as there was no bullish price action when the two nearest support levels were reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken before 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 $0.6560, $0.6595, or $0.6631.
- 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 $0.6519, $0.6489, or $0.6438.
- Place 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 on Wednesday last week that the AUD/USD currency pair had no convincing direction, although it seemed to have found quite firm support at $0.6750 which is confluent with a major quarter number.
I thought that the best approach in this currency pair would probably be to trade a reversal from support or resistance if the FOMC release due later causes a price spike.
This could have given a profitable but limited short scalp from the resistance level at $0.6781.
The technical picture has changed quite a lot since then, and become much more bearish, as this pair has sold off quite strongly to descend to new 2-month lows, with the big round number at $0.6500 in sight.
There is not much further to go before even longer-term lows are reached.
As a key risk barometer, the Australian Dollar has been hit by stock market declines in recent days, and the downgrading of its USA rating by Fitch.
The US Dollar as a safe haven is the strongest major currency now, so there is a reason to be focused on this pair in these conditions.
Looking at the price chart below, it seems the decline is slowing a bit, but a short trade from a bearish reversal at any resistance level still looks like a good bet.
Bears should just watch out for the fact that we are now close to the big round number at $0.6500, so the support levels in that area could be strong, and hold for at least a while.
Concerning the USD, there will be a release today of Unemployment Claims data at 1:30pm London time, followed by ISM Services PMI at 3pm. Regarding the AUD, there is nothing of high importance scheduled today.
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