AUD/USD Forex Signal: Consolidating Between 0.6925 and 0.7000

Adam Lemon

The Bank of Japan will be giving their monthly policy release later during the Asian session, and this may push the value of the Australian Dollar around too.

AUD/USD: More bearish below 0.6925

Yesterday’s signals were not triggered as the price did not quite touch the support level identified at 0.6926 until after the end of the Asian session. However, this support has continued to hold.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken from 8 am New York time Tuesday to 5 pm Tokyo time Wednesday.

Long Trade Ideas

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6926 or 0.6885.
  • Place the stop loss 1 pip below the lowest recent price.
  • Adjust 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 ride.

Short Trade Ideas

  • Go short immediately upon the next touch of 0.7109.
  • Place the stop loss 1 pip above the highest recent price.
  • Adjust 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 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 I thought the dominant consolidation pattern was likely to continue.

The only good trade set up I saw as possibly emerging was a long entry from a bullish bounce at 0.6925, although a short trade from a rejection of 0.7000 might also work.

This was a good and accurate call that correctly anticipated the day’s price movements.

We have seen the range continue to hold and it looks likely to hold for another day.

However, the Bank of Japan will be giving their monthly policy release later during the Asian session, and this may push the value of the Australian Dollar around too.

A breakdown below 0.6926 would see the completion of a bearish head and shoulders pattern from 0.7000, and as such could trigger a sharper, further move down.

Alternatively, if the price can get established above the round number at 0.7000, that would be a bullish sign.

AUD/USD

There is nothing of high importance scheduled today regarding either the AUD or 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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