AUD/USD Forex Signal: Weakly Bullish Consolidation

Adam Lemon

AUD/USD: Close to both strong support and resistance

Yesterday’s signals produced a losing short trade from the resistance level identified at 0.7144.

Today’s AUD/USD Signals

Risk 0.75%.

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

Long Trade Ideas

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7144, 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 I would be happy to take a short-term long trade from a bounce at 0.7100 or from further bearish rejections of either of the nearby two resistance levels.

This was not a great call as it produced a losing short trade from the rejection of the resistance level at 0.7144. However so far, the other higher level at 0.7168 has held.

The picture is a little more bullish, with risk-on sentiment improving over the past day and riskier assets tending to rise. However, this trend does not look very strong over the short to medium term.

This uncertainty is compounded by the fact the price is now stuck between seemingly strong support at 0.7144 and strong resistance at 0.7168 within a very narrow range.

I doubt we will see a clear breakout from this range, I expect instead that we will see failed breakouts both sides and a messy, choppy, ranging situation.

Therefore, I will avoid trading this currency pair for the time being until the situation becomes clearer.AUDUSDThere is nothing of high importance scheduled today concerning the USD. Regarding the AUD, the RBA will release its Financial Stability Review at 1:30am 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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