AUD/USD Forex Signal: Bullish Break Above Price Channel

Adam Lemon

Other currencies are rising more strongly against the weak U.S. Dollar than the Australian Dollar is.

AUD/USD: Yet bears still holding 0.7000

Yesterday’s signals produced a losing short trade from the hourly bearish doji candlestick which rejected 0.6972.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken from 8 am New York time Thursday to 5 pm Tokyo time Friday.

Long Trade Ideas

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6971 or 0.6554.
  • 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 the technical picture had become more bearish due to the short-term symmetrical bearish price channel which seemed to be effectively pushing the price down.

I would have been happy to take a short trade from a bearish reversal at 0.6951.

This was a good enough call to keep out of trouble despite the bullish turnaround which took place after the price broke up firmly above 0.6951 before appearing to falter at 0.6972, and then finally breaking up above that level.

The bulls made a breakout but have been unable to push the price up much higher, with the high so far just grazing the big round number at 0.7000. This may act as resistance.

What is interesting here is that other currencies are rising more strongly against the weak U.S. Dollar than the Australian Dollar is. This makes me cautious about being bullish even though the technical picture has become more bullish.

With no obvious nearby resistance levels beyond 0.7000, I would avoid trading this currency pair for the time being.

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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