AUD/USD Forex Signal: Weakly Bullish Above 0.6706 - 4 February 2020

Adam Lemon

AUD/USD: Very pivotal point at 0.6677

Yesterday’s signals were not triggered, as the bearish price action took place slightly above the resistance level at 0.6724.

Today’s AUD/USD Signals

Risk 0.75%.

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

Short Trade Ideas

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6725, 0.6740, or 0.6781.

  • 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 0.6706 or 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.

AUD/USD Analysis

I wrote yesterday that traders would be well-advised to watch how the pair behaved at or near 0.6677 closely after the RBA release. This was a good call as the price got extremely close to that level before turning bullish and rising upon the RBA release, and continued to establish higher support at 0.6706. The price may have put in a long-term bottom near these historic lows.

The longer support levels can hold, the greater the chances will be that we have just seen a major bullish reversal. The chances are still against it, but the payoff could be very big if we do not revisit the recent low.

The picture will look much more bullish, and I would take a bullish bias, if the price can get above 0.6750 later today.AUDUSDRegarding the AUD, the Governor of the RBA will be giving a minor speech at 1:30am London time. There is nothing of high importance due today concerning the USD.

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

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