AUD/USD Forex Signal

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AUDUSD analysis: more bullish above 0.6940

Last Thursday’s signals were not triggered as unfortunately the bullish price action took place just below the support level at 0.6904.

Today’s AUD/USD Signals

Risk 0.75%.

Trades can be taken between 8am New York time Monday and 5pm Tokyo time Tuesday.

Long Trades

  • Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.6940 or 0.6904.

  • Put 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.

  • Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.

Short Trades

  • Short entry following some bearish price action on the H1 time frame immediately upon the next touch of 0.6963 or 0.6986.

  • Put 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.

  • Take off 50% of the position as profit when the trade is 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.

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AUD/USD Analysis

I wrote last Thursday that technically the picture remained the same (somewhat more bullish than bearish), we just needed to move the nearest support level down to just above 0.6900.

I continued to take a similar approach: bullish above 0.6900 and very willing to take long trades at any returns to key support levels. If the price could get established above 0.6937 then that would be a very bullish sign.

This was a very good call as after pulling back to the round number at 0.6900 the price took off again in an upwards direction, unfortunately I was just a little out with my precise support level there.

The picture is more bullish now which can be seen from the fact that the price has been able to get established above 0.6937 although I move that up a little to 0.6940 as a flipped level.

So, despite the fact that we may have seen a major price bottom last week which could hold for the long-term, the short-term technical outlook here is very uncertain as we have some major Australian data due later which could push the price around. However, if you are looking for a deeper reason for this bullishness, one answer could be the government’s victory in the recent Australian election, which seems to have boosted the Australian Dollar in a solid way. It is quite rare to see the AUD advance while stocks are selling off and money is flowing into safe havens such as the Japanese Yen and Gold.AUDUSDRegarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.

Concerning the AUD, there will be a release of Retail Sales data at 2:30am followed by the RBA Rate Statement and Cash rate at 5:30am.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.