AUD/USD Forex Signal: Aussie Very Weak

Adam Lemon

AUD/USD: 0.7000 area looking interesting as potential support

Yesterday’s signals were not triggered, as there was no bullish price action when the support level at 0.7041 was reached.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be taken from 8 am New York time Tuesday to 5 pm Tokyo time Wednesday.

Long Trade Ideas

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7004 or 0.6963.
  • 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 0.7048, 0.7058, or 0.7070.
  • 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.

AUD/USD Analysis

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

This was not a good call as the price has fallen further and the action still looks bearish with the action printing new lower resistance levels, which is a bearish sign suggesting that the price will continue to fall over the short-term.

Despite the bearishness, we have support just above the big round number at 0.7000 which might produce some long-term buying which could drive the price up again. It is only Tuesday, so the price could still end the week higher after such a strong downwards counter-trend movement, so I am definitely looking for a buy if we get a bullish bounce at 0.7004 later.

The RBA’s meeting minutes release has added to the current weakness in the Aussie as it hints at further monetary easing on their agenda. Yet we can still see a major low get printed later today in spite of that.

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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