My previous signal on 9th January was not triggered as none of the key support or resistance levels were reached that day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades must be taken prior to 5pm Tokyo time Wednesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6622 or $0.6634.
- 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 1H1 time frame H1H1H1 time frame immediately upon the next touch of $0.6602 or $0.6528.
- 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 one week ago that the AUD/USD currency pair was seeing a slowing of bearish momentum, leading to a neutral consolidation between $0.6671 and $0.6737. I thought that the best approach for that day would be to play the range.
This was a good call insofar as the price remained within the range that day, but neither of the extremes were reached, so unfortunately, I had no clear trade opportunity arising. The technical picture is now more bearish, as the US Dollar rose to reach a new 1-month high, which was expressed especially against this currency, so in recent hours we have seen the price make a bearish breakdown below key support and reach a new 1-month low.
The US Dollar is currently the strongest major currency as US yields rise, and the Australian Dollar is the weakest as it suffers as a classic risk currency from the risk-off theme which has been dominant so far since 2024 began.
I see the outlook as basically bearish over the short-term, so the best opportunity will probably be a short trade from a retest and bearish rejection of either the resistance level at $0.6622 or $0.6634 – a simultaneous rejection of both at the same time with one Japanese candlestick could be a powerful short trade entry signal. However, I would ideally want to see the price get established below $0.6600 before entering any short trade, as the price would have a long way to potentially fall below that.
Alternatively, a long scalp from the support level at $0.6602 could be a profitable trade.