AUD/USD Forex Signal: Bullish Above 0.7768

Adam Lemon

Risk sentiment is generally holding up despite yesterday’s chaotic scenes from the U.S. Capitol. 

Last Tuesday’s AUD/USD signal were not triggered as there was no bearish price action when the resistance level identified at 0.7740 was first reached, and the low was made a few pips above the support level at 0.7686.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken prior to 5pm Tokyo time Thursday.

Short Trade Idea

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7851.

  • Put the stop loss 1 pip above the local swing high.

  • 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 price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7768 or 0.7726.

  • Put the stop loss 1 pip below the local swing low.

  • 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 price reaches 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 last Tuesday that there were good reasons to be bullish on this currency pair, especially if the price broke above the key resistance level which I have identified at 0.7740. This level has already acted as a bearish double top, so I saw it as likely to be pivotal last Tuesday.

This was a good call, as the price rose that day to make a bullish breakout beyond 0.7740. At the time of writing, an entry from my signal there would be in about 30 pips of profit.

The picture technically is now more bullish, with the price printing new higher support levels, and making a new long-term high yesterday.

Risk sentiment is generally holding up despite yesterday’s chaotic scenes from the U.S. Capitol. The nearest support at 0.7768 looks likely to be pivotal – if it holds up, we will probably see a continuing advance towards the next resistance level at 0.7851.

I will be happy to enter a new long trade if we get a bullish bounce at 0.7768 later today.

AUD/USD chart

There is nothing of high importance scheduled today regarding the AUD. Concerning the USD, there will be a release of unemployment claims data at 1:30 PM London time followed by a release of ISM Service PMI data at 3 PM.

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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