My previous signal on 16th October was not triggered, as none of the identified support or resistance levels were reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be entered before 5 pm 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 $0.6330, $0.6351, or $0.6388.
- 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 $0.6278 or $0.6166.
- 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 last Monday that the AUD/USD currency pair was looking weakly bullish and that the support at $0.6278 was likely to be quite strong if it is reached.
This call wasn’t tested as the price never reached this support level that day.
The technical picture is more bearish now, with the price quite close to making a new 1-year low by threatening to make a bearish breakdown below the key support level at $0.6278 which looks likely to be very pivotal. This more bearish picture comes with sentiment beginning to favour the US Dollar again as risk-on willingness declines following hawkish comments from a Fed member and as fears continue that the middle east war might widen. As a key risk barometer, this picture is also likely to be negative for the Australian Dollar.
For these reasons it seems to make sense to seek a short trade entry. There are two possible approaches:
- Conservative – wait for a retracement to and rejection of the nearest resistance level at $0.6330.
- Aggressive – wait for two consecutive lower hourly closes below $0.6278.
Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time. There is nothing of high importance due today concerning the AUD.
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