AUD/USD Forex Signal: Selling Off From 0.6473 - 6 May 2020

AUD/USD: More bearish after new lower swing high

Yesterday’s signals were not triggered as unfortunately the bearish price action at 0.6473 was not strong enough to trigger a short trade entry.

Today’s AUD/USD Signals

Risk 0.75%.

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

Short Trade Idea

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6473.

  • 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 Idea

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6327.

  • 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 yesterday that I thought the price would keep trading below the resistance level at 0.6464. I was technically wrong as the price got as high as the resistance level 9 pips above that before turning bearish, but as I was looking for a bearish turn I was on the right track.

Although stock markets are still firm, in Forex markets it is a case today of risk-on price movement, with the Japanese Yen the strongest currency, followed by the USD, while the riskier currencies are weaker, although the European currencies are moving down by much more than the AUD has so far today.

Technically, the picture is more bearish, with the resistance at 0.6473 holding and the price now falling from a first lower swing high after it rejected that resistance level. The price has plenty of room to fall as there are no support levels until 0.6327.

I will take a bearish bias if we get two consecutive hourly closes below the round number at 0.6400.AUDUSDConcerning the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time. Regarding the AUD, there will be a release of trade balance data at 2:30am.

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.