AUD/USD Forex Signal

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AUDUSD: Bullish inner trend line break?

Yesterday’s signals were not triggered, as none of the key levels were ever reached.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be entered before 5pm Tokyo time Wednesday.

Short Trade Ideas

  • Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6740, 0.6750, and 0.6769.

  • 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.

  • Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

Long Trade Idea

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6677.

  • 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.

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

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AUD/USD Analysis

I wrote yesterday that the picture was looking much more solidly bearish, with a symmetrical bearish price channel which seemed poised to push the price down from 0.6730. I thought that it was hard to see how the price was not going to descend to the 0.6700 area at least. However, I noted that there was a major data release due later concerning the AUD which could push the price around in a very unpredictable way.

This was a good call as the price did descend until the big release from the Australian central bank (the RBA), which left the cash rate unchanged at 1.00% and boosted the Australian Dollar considerably with a rise which is still ongoing to new highs on the shorter-term charts. We have seen a break over the past few hours above the upper trend line of the bearish channel which is a bullish sign. We also have a long to medium-term triple bottom at the 0.6690 area, which suggests that the price may find it difficult to get meaningfully lower than this. However, on the other hand, there is a lot of resistance within the 75 pips above the current price, and it is hard to see much of this area being broken to the upside.

Therefore, I would still have a bias towards taking short trades at 0.6740 or any of the resistance levels up to 0.6800, but I would be looking to take profit before 0.6700 is reached.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 GDP data at 2:30am.

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.