AUD/USD Forex Signal: Strong Bearish Breakdown

Adam Lemon

The bullish recovery here still looks very doubtful.

AUD/USD: Support at 0.7139 likely to hold

Yesterday’s Signals were not triggered as there was no bullish price action when either of the support levels were reached.

Today’s AUD/USD Signals

Risk 0.75%.

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

Long Trade Ideas

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7139 or 0.7121.
  • Put the stop loss 1 pip below the lowest recent price.
  • Move 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 run.

Short Trade Ideas

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.7197.
  • Put the stop loss 1 pip above the highest recent price.
  • Move 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 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 although we were likely to see a further rise today, bulls should be a little concerned about the small, indecisive candlesticks that were being printed leading up to the New York session.

I was ready to take a long trade after the New York open if we had gotten a retracement to 0.7261 and a firm bullish bounce there.

Luckily, this did not set up, as a strong recovery in the USD pushed the price of this pair down hard.

The movement down was strong but is showing signs of having found a bottom near the support level of 0.7139. However, the bullish recovery here still looks very doubtful, so I see the most likely scenario today as a consolidation above 0.7139.

There might be a long trade opportunity later from 0.7139, but I prefer to stand aside from trading this currency pair today and waiting to see what happens next before opening any new trades.

AUD/USD

There is nothing of high importance due today concerning either the USD or the AUD.

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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