AUD/USD Forex Signal

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AUDUSD: Dominant bearish trend line still holds

Yesterday’s signals produced a profitable long trade from the bullish bounce off the support level I identified at 0.6822. However, this only gave the minimum 20 pips of profit.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be entered from 8am New York time Tuesday to 5pm Tokyo time Wednesday.

Short Trade Ideas 

⦁ Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6803, 0.6822, or 0.6862. 

⦁ 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 Ideas 

⦁ Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6769, 0.6754, or 0.6744. 

⦁ 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 price was likely to continue to fall and reach the support level at 0.6769. I suggested being very careful about taking any long trade due to the bearish trend. 

This was a good call as the price did fall to that level at 0.6769 where it bounced to the pip, giving a small long trade, which I was correct to be cautious over due to its relatively limited scope.

The technical picture is still bearish as the medium to long-term descending trend line continues to hold, as shown in the chart below, although we have had a bit of a bounce at the first support level as mentioned.

I’d be more bearish below 0.6769 and more bullish above 0.6803, but I still prefer short trades from resistance levels here overall. AUDUSDRegarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.

Concerning the AUD, there will be a release of Construction Work Done data at 12:30am.

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