AUD/USD Forex Signal: Uncertain Technical Picture

Adam Lemon

Market sentiment is becoming increasingly “risk off” which would normally hit the Australian Dollar hard, but it has some long-term strength which is holding up.

Relative strength in the AUD

Yesterday’s signals were not triggered as there was insufficiently bullish price action to trigger long trade entries when 0.6511 and 0.6473 were first reached.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be entered from 8am New York time Wednesday to 5pm Tokyo time Thursday.

Short Trade Idea

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6498.
  • Put 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 Idea

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6420.
  • Put 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.

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AUD/USD Analysis

I wrote yesterday that the area around 0.6500 was likely to be pivotal again. I was be ready to take a bearish bias if we had gotten another failure to break above 0.6500 once New York opens. If the price instead gets established above 0.6520, that would be a bullish sign.

This was a pretty good call as we only got one hourly close above 0.6520 before the price fell again back below the 0.6500 area, so the level was correctly identified as pivotal.

The technical picture is confused and quite consolidative. We still have resistance intact very close to 0.6500 and this could again provide a pivotal point for the day, but I am becoming less confident in it. Also, I am not very confident in the support at 0.6420 either.

Market sentiment is becoming increasingly “risk off” which would normally hit the Australian Dollar hard, but it has some long-term strength which is holding up.

For these reasons, I will stand aside and wait either to see the price end the New York session clearly above 0.6520, which would be a bullish sign for tomorrow, or clearly below 0.6420, which would be a bearish sign instead.

 

AUD/USD

Regarding the USD, the Chair of the Federal Reserve will be giving a minor speech at 2pm London time. Concerning the AUD there will be releases of Employment Change and Unemployment Rate data at 2:30am.

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

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