AUD/USD Forex Signal: Consolidation Above 0.7130

Adam Lemon

AUD/USD: RBA signals upcoming rate cut

Yesterday’s signals were not triggered as there was no bullish price action when the support level at 0.7164 was first 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 0.7130, 0.7100, or 0.7075.
  • 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 0.7168, 0.7229, or 0.7248.
  • 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 we were likely to see higher prices over the New York session if it made a new high for the day early on, but I thought also that the resistance at 0.7228 would most likely hold until the later key Australian data.

This was a good call as the price could not really break to a new high for the day during the early part of the New York session, although it rose slightly until the RBA signaled it would make another interest rate cut next month. This pushed the price down below the former nearby support level, although not by a great deal.

The technical picture still shows some residual bullishness, but we are essentially seeing a bullish consolidation above 0.7130.

Much now seems likely to depend upon whether the new lower resistance at 0.7168 holds or not. If it does, that will be a bearish sign, but I would not want to take a short trade from there yet. However, I would be happy to take a long trade from a bullish bounce which may happen at 0.7130 later.

AUD/USD

Concerning the AUD, the Australian Government will be releasing its Annual Budget shortly. Regarding the USD, the Chair of the Federal Reserve will be giving a minor speech at 3:40 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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