My previous signal on 13th December was not triggered, as there was insufficiently bearish price action at all the resistance levels which were first reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only 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 $0.6729, $0.6756, or $0.6781.
- 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 $0.6671, $0.6654, or $0.6634.
- 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 was moving lower within a wide and symmetrical bearish price channel.
I thought resistance would be strong and so there could be short trade opportunities. In fact, the FOMC release sent the price flying higher, breaking out of its bearish price channel and rising strongly to new highs.
The past few days have seen the price consolidate within a very clearly defined range. The consolidation looks bullish, so two consecutive higher hourly closes above $0.6729 could be a good entry signal for a long trade, although a bounce off the support level at $0.6671 would probably give an even better long trade entry.
The technical picture’s bullishness is reinforced by stronger sentiment against the US Dollar, with markets expecting rate cuts to begin during the first half of 2024. A more interesting question is whether risk sentiment is strong enough to lift the Australian Dollar. If so, we are likely to see further strong price rises here.
I am not interested in any short trade here today.
There is nothing of high importance scheduled today concerning either the AUD or the USD.
Ready to trade our daily Forex signals? Check out this list of the best Australian Forex brokers worth checking out.