AUD/USD Forex Signal: Sideways Pattern Emerging - 6 February 2020

Adam Lemon

AUD/USD: Long-term low near 0.6677?

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

Today’s AUD/USD Signals

Risk 0.75%.

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

Short Trade Ideas

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6781, 0.6799, or 0.6817.

  • 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 0.6725 or 0.6706.

  • 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 I thought the chances were increasing that we have seen a major long-term low, so long-term long trades could still be interesting here. However, I also noted that we had major data releases scheduled for both currencies later, so direction was hard to predict. I thought we may now see some sideways action for a while.

This was a good call as the price topped rising and has declined in recent hours, but none of the key levels have been hit, so really we are starting to see more of a sideways technical pattern emerging, with bulls and bears now looking more evenly balanced.

The really interesting technical item here is the long-term multi-year support which has now produced a triple bottom. We may be seeing a long-term low meaning this pair could be an interesting long-term buy, so watch very carefully how the price reacts now at support levels: strong bounces at support could be great buying opportunities.AUDUSDConcerning the AUD, the Governor of the RBA will be testifying before Parliament at 10:30pm London time, followed by the RBA’s Monetary Policy Statement release at 12:30am. There is nothing of high importance due today regarding 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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