AUD/USD Forex Signal: Wide-Swing Consolidation

Adam Lemon

We are certainly seeing short-term bullish momentum here today, and I have little faith in the support level identified at 0.7174.

AUD/USD: Strong support at 0.7139

Last Thursday’s signals produced a profitable long trade from the bullish pin candlestick which rejected the support level identified at 0.7139.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be entered from 8 am New York time Monday to 5 pm Tokyo time Tuesday.

Long Trade Ideas

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.7131 or 0.7121.
  • 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 following bearish price action on the H1 time frame immediately upon the next touch of 0.7217 or 0.7255.
  • 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 last Thursday that I saw the most likely scenario over the day as a consolidation above 0.7139.

I thought that there might be a long trade opportunity later from 0.7139, but I preferred to stand aside from trading this currency pair, the latter part of which was not a great call.

We are certainly seeing short-term bullish momentum here today, and I have little faith in the support level identified at 0.7174.

However, zooming out from the short-term, it seems as if bulls and bears are evenly matched, with strong support at 0.7139 and key resistance overhead at 0.7217. This area seems likely to hold over the course of today, so I would be interested in a short trade from a bearish reversal at 0.7217 or a bullish reversal from 0.7139.

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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