AUD/USD Forex Signal

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AUDUSD: Bullish reversal from 0.6900

Yesterday’s signals may have produced a losing short trade from the bearish price action at 0.6955, although that was against my bias.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be entered prior to 5pm Tokyo time Friday.

Long Trade Ideas

  • Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.6969 or 0.6955.

  • 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 Trade Ideas

  • Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.6993 or 0.7002.

  • 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 yesterday that the price had made a strong bullish move over the past couple of hours from about 0.6910, and although the move was not very big, it did look significant. I also said that I would take a bearish bias if we got a firm bearish rejection at 0.6955 after the FOMC minutes are released later. This was a good call as the price has continued to rise firmly, and the rejection of 0.6955 which did happen took place too early, before the FOMC release.

The picture now is more bullish, and the price looks likely to retest the 0.7000 area. However, there is major U.S. data due soon, which could push the price around in an unpredictable way, so I take no directional bias today.AUDUSDThere is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of CPI (Inflation) data at 1:30pm London time today, followed by testimony from the Chair of the Federal Reserve before the Senate at 3pm.

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.