AUD/USD Forex Signal - 22 October 2019

Adam Lemon

AUDUSD: Medium-term topping out?

Last Thursday’s signals were not triggered, as there was insufficiently bearish price action at 0.6832.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken between 8am New York time Tuesday and 5pm Tokyo time Wednesday.

Short Trade Idea

  • Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6917.
  • 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.
  • 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.

Long Trade Ideas

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6857, 0.6840, 0.6832 or 0.6809.
  • 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.
  • 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.

AUD/USD Analysis

I wrote last Thursday that the break above 0.6809 seemed to complete a bullish head and shoulders neckline break on a daily chart, so I thought that the picture was much more bullish as long as the price could remain trading above that level. This was a good call as the price continued to rise all the way to 0.6880 before making the current bearish pull-back.

The price action does not suggest that the price is quite ready to fall significantly yet, but a look at the daily chart shows that we seem to be getting a topping-out and the start of a medium-term bearish turn. However, as the U.S. Dollar is generally weak, it will probably be best to stand aside for the time being and wait to see how the situation develops with this currency pair.

audusd

There is nothing of high importance due today concerning either the AUD or the USD.

About the Author
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

Currency Pairs:
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