AUD/USD Forex Signal: Bullish Consolidation Below 0.7250

Adam Lemon

AUD/USD: Weak U.S. Dollar

Last Thursday’s signals produced a short trade from 0.7168 which gave some profit until a whisker about the nearest support level at 0.7144, which then produced a strong bullish move. However, I did recommend not entering any trades in this pair that day.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be entered between 8 am New York time Monday and 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 0.7210, 0.7168, or 0.7145.
  • 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 0.7248, 0.7281, or 0.7310.
  • 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.

AUD/USD Analysis

I wrote last Thursday that the price was stuck between seemingly strong support at 0.7144 and strong resistance at 0.7168 within a very narrow range.

I doubted we would see a clear breakout from this range, I expected instead that we would see failed breakouts on both sides and a messy, choppy, ranging situation.

I was wrong as both levels were respected until the real bullish breakout above 0.7168 happened during the Asian session.

The situation is now considerably more bullish, with stronger risk-on sentiment weakening the USD, but bulls still have to overcome the resistant area at about 0.7250 to get the price meaningfully higher. If the price can get established above this area, it would be a very bullish sign, and in line with the prevailing bullish trend.

Therefore, I am ready to take a long trade from a bullish bounce at 0.7210, or from the second consecutive hourly close above 0.7250 which might happen after today’s New York open.

AUD/USD

There is nothing of high importance due today regarding either the USD or the AUD. It is a public holiday in the U.S.A. today.

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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