AUD/USD Forex Signal: Weakly Bullish

Adam Lemon

There is a lot of worry over the future of Australia’s economic prospects coming more to the fore and that is starting to hold back the Australian Dollar a bit.

AUD/USD: Coming back as risk appetite improves

Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level at 0.7317 was reached.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken between 8 am New York time Tuesday and 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 0.7248 or 0.7229.
  • 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

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.7340, 0.7363, or 0.7379.
  • 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.

 

Trade long or short with

any of our selected brokers

Trade long or short

with any of our selected brokers

AUD/USD Analysis

I wrote yesterday that due to the strong consolidation pattern, I was equally ready to take a short trade from a bearish rejection at 0.7317 or a bullish bounce at 0.7248.

I also thought that the RBA release a few hours ago might be the catalyst for a breakout from this range, which was correct – although it was a very weak bullish breakout.

The technical picture is now a little more bullish, which is natural as risk appetite is improving somewhat and the Australian Dollar typically benefits from that. However, there is a lot of worry over the future of Australia’s economic prospects coming more to the fore and that is starting to hold back the Australian Dollar a bit.

Technically, we have a number of quite closely packed resistance levels between 0.7340 and 0.7395, which look likely to make any further significant upwards movement difficult.

I think the price is likely to end the day higher, but the bullish movement looks risky and prone to reversal. Therefore, I will only be comfortable taking a long trade from a bullish bounce at a key support level.

AUD/USD

There is nothing of high importance due today regarding 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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