My previous signal on 31st October might have produced a nicely profitable bullish trade from the rejection of the supportive area which I had identified at $0.6330.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken before 5pm Tokyo time Friday.
Short Trade Idea
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6517.
- 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 $0.6391, $0.6345, or $0.6299.
- 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 last Tuesday that the AUD/USD currency pair was likely to continue consolidating between about $0.6275 and $0.6400, with the best opportunities at reversals from these extremes. This was a good and accurate call for the day.
The technical picture is now considerably more bullish, and this has been driven mostly by yesterday’s US Federal Reserve policy meeting which left interest rates unchanged for the second successive meeting and signalled a more prolonged pause in rates. This boosted risk sentiment, and with AUD a key risk barometer currency and the US Dollar acting as a major safe haven, this currency pair has gained quite strongly over recent hours.
We see a bullish breakout beyond the $0.6400 area which has effectively acted as a strong cap on the price action for a few weeks.
Another bullish factor is that the price seems to have room to rise, with no obvious resistance levels until $0.6517.
I think the price is likely to continue rising today, and may well reach $0.6500, where it would likely sell off at least a little, and possibly make a deeper bearish retracement.
Regarding the USD, there will be a release of Unemployment Claims data at 12:30pm London time. There is nothing of high importance due today concerning the AUD.
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