My previous signal on 11th October produced a profitable long trade entry signal from the bullish price action reversal at the support level at $0.6388.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken prior to 5pm Tokyo time Tuesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6388 or $0.6408.
- 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 Idea
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6278.
- Put 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 was showing strong short-term bearish momentum, and that the price may retrace to the support level shown within the price chart below at $0.6388.
This was a good call as the price did reach that level, before finding support there right to the pip, which could have given a small but profitable long trade.
The technical picture has changed somewhat since then, as the past few days have seen an increase in risk-off sentiment, which typically boosts the USD and sends the AUD lower. This time was no different. The US Dollar has strengthened on war in the middle east and the growing belief that the US Fed will make one more rate hike before the end of 2023.
After declining quite strongly, there are initial signs as this new week opens that risk sentiment is recovering a bit, as analysts seem to be more convinced that the war between Israel and Gaza is likely to remain contained.
The support at $0.6278 is likely to be quite strong if it is reached. However, the price has now reached an area of congestion that is not close to any support or resistance level.
If the price falls to $0.6278 and bounces there, I would be ready to enter a new long trade.
Regarding the USD, there will be a release of US Empire State Manufacturing Index data at 1:30pm London time. Concerning the AUD, there will be a release of the RBA’s Monetary Policy Meeting Minutes at 1:30am.
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