My previous signal on 6th February was not triggered, as the bearish price action took place above the resistance level at $0.6512.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades may only be taken before 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 $0.6512 or $0.6590.
- 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 $0.6480, $0.6456, or $0.6391.
- Put the 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 about one week ago that the AUD/USD currency pair was likely to find the day’s pivotal point at the zone between $0.6520 and $0.6528. This was not a great call, as after getting establish above this zone, the price later fell the next day.
The technical picture is suggestive of a deadlock between bulls and bears, although bulls have been winning over recent hours. This short-term bullish move has pushed up the price, but the price is now running into the resistance level at $0.6500, and there is another resistance level just above that at $0.6512. The resistance levels are supported by a descending trend line which is currently confluent with $0.6500, so the resistance here might be enough to suppress the price.
If the bulls can push the price up so it gets established above $0.6512, that would be a bullish sign suggesting a further rise. I would be even more bullish if the price gets established later above recent swing highs at about $0.6540. The price would then have room to rise as high as the next resistance level at $0.6590, so a long trade entry might be signalled by two consecutive bullish hourly candlesticks closing higher above $0.6512, and ideally $0.6540 also.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be releases of Retail Sales, Empire State Manufacturing Index, and Unemployment Claims data at 1:30pm London time.
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