AUD/USD Forex Signal: Uncertain Recovery

Adam Lemon

AUD/USD: 0.7000 looking more likely to hold

Last Thursday’s signals were not triggered, as none of the key levels were reached that day.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken 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 0.7041 or 0.7004.
  • 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 0.7145/50 or 0.7176.
  • 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 outlook had become much more bearish now, with the former bearish price channel breaking down hard and exponentially. I thought that it was quite likely that we would see still lower prices over the coming day, but a bullish bounce at 0.7004 could be a good medium to long-term buying opportunity.

This was not a great call as the price did not really fall any further over the course of the day. However, it more or less went sideways so there was no great damage done.

I was surprised that the price has not fallen further to hit the nearest support and instead has made a consolidation and now, seemingly, a bullish turn with the price heading towards the 0.7145 area.

The price fell last week by more than 2% while remaining above its levels from both 3 and 6 months ago, meaning this strong dip within a clear long-term bullish trend is probably a buying opportunity. Usually, we would expect the price of this currency pair to rise over the coming week.

AUD/USD

There is nothing of high importance due today regarding the AUD. Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech at 1 pm London time.

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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