AUD/USD Forex Signal: Signs of Recovery

Adam Lemon

AUD/USD: 0.7070 level looks like pivotal support

Yesterday’s signals produced a short trade from a bearish reversal at the resistance level identified at 0.7070 which broke even after making the minimum 20 pips of profit.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be entered between 8 am New York time Wednesday and 5 pm Tokyo time Thursday.

Long Trade Ideas

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.7046 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 / 0.7150.
  • 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 yesterday that despite the bearishness, we had 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 was definitely looking for a buy from 0.7004.

I was correct to look to the long side, as after hitting a low at 0.7020, the price bounced back quite strongly.

Technically, the fact that the price broke above three resistance levels and is still holding up above the former resistance level at 0.7070 as new support, is a bullish sign. Another bullish indication is that the price is still below its weekly open, yet after such a sharp counter-trend movement as we saw here last week, the price is most like to end this week above its open – statistically, there is about a 55% chance of that.

I see the best potential here as a long trade, especially from 0.7070 if that level holds as support.

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

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.