My previous signal last Thursday might have produced a few pips of profit from a long scalp off the support level at $0.6559 during the Asian session that day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades may be entered before 5pm Tokyo time Friday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6633 or $0.6737.
- 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 $0.6590, $0.6573, or $0.6541.
- Place the 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 one week ago that the AUD/USD currency pair looked very flat with no directional bias, so scalping off any key support or resistance level reached looked like a good strategy.
This was an OK call as there was such a scalping opportunity during the Asian session.
The technical picture and sentiment have changed quite a bit here following yesterday’s policy meeting at the Federal Reserve, which convinced the market there will be 3 US rate cuts over 2024, leading to a decline in the USD and a boost for all risky assets such as the Australian Dollar.
The price has been rising ever since and as the London open approaches, the price is hanging at the key resistance level of $0.6633. This looks very likely to be today’s pivotal point, and I think bulls will overcome this level, after which the price will have a lot of room to rise further, making long trades attractive.
I will enter a new long trade if we get two consecutive hourly closes above $0.6633.
Alternatively, a short trade from a bearish reversal at $0.6633 could be interesting, but I would be nervous of taking such an entry unless the rejection persisted repeatedly for three or four hours at least.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be releases of PPI, Retail Sales, and Unemployment Claims data at 12:30pm London time.
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