My previous signal on 15th August produced a profitable long trade from the bullish doji reversal at the support level at $0.6438.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken before 5pm Tokyo time Wednesday
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6385, $0.6350, or $0.6324.
- 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 $0.6385, $0.6350, or $0.6324.
- 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 that the AUD/USD currency pair might provide an opportunity on the long side, which I was not correct about as a breakout, although it worked as a ‘buy the dip’.
The technical picture here is bearish, as the Australian Dollar has been sold off over recent hours, especially since the Reserve Bank of Australia made its policy decision to hold its interest rate at 4.10%, signaling a default mode of no further increases unless necessary. The Bank said inflation is still too high, but that rates are working. This is a fundamental reason for bearish sentiment on the AUD.
The short-term technical picture shows not only bearish momentum but that the price is approaching a very significant area of support at $0.6385, which has strongly held several times over recent days. The downward push is likely to continue to this price, or one just above it, and what then happens is likely to be pivotal.
I doubt the price will get established below $0.6385 today, so I think the best approach here today will be to try to scalp long bounces off $0.6385, while being ready to let the bounce run, as the first touches could produce a nice number of pips.
If the price hangs at $0.6385, and breaks down tomorrow or even later today, that will be a significant bearish sign.
Concerning the AUD, there will be a release of GDP data at 2:30am London time. There is nothing of high importance due today regarding the USD.
Ready to trade our daily Forex signals? Compare this list of the best currency trading platforms in Australia to trade with.