My previous signal on 19th 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 must be entered prior to 5pm Tokyo time Friday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6775 or $0.6877.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6752, $0.6724, or $0.6671.
- 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.
AUD/USD Analysis
I wrote in my previous forecast a little more than two weeks ago that the AUD/USD currency pair was consolidating within a very clearly defined range. The consolidation looked bullish, so two consecutive higher hourly closes above $0.6729 could be a good entry signal for a long trade, and this was a good and profitable call.
The technical picture now is dominated by the strong fall yesterday which is running out of momentum. The fall was driven by a widespread advance in the US Dollar, which was against the long-term trend. This was likely due to a New Year repositioning.
The price now seems to have found support at the level in the price chart confluent with the major quarter-number at $0.6750. If the price breaks below that, it then faces another barrier at $0.6725.
I think the trade to watch out for would be two consecutive hourly closes above $0.6775, as the price has so much room to rise once that resistance level is overcome.
Price movements are usually hard to predict in the first week of January as markets tend to be volatile, and this week looks like being no exception.
Regarding the USD, there will be releases of ISM Manufacturing PMI data, JOLTS Job Openings, and FOMC Meeting Minutes. There is nothing of high importance scheduled today concerning the AUD.
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