AUD/USD Forex Signal: Most Bullish Pair

Adam Lemon

Not only have we seen the price bounce back quickly here, but the Aussie seems stronger today than any other major currency against the USD.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be entered before 5pm Tokyo time Wednesday.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7740 or 0.7809.

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

  • Move the stop loss to break even once the trade is 20 pips in profit.

  • Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7686, 0.7674, or 0.7642.

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

  • Move the stop loss to break even once the trade is 20 pips in profit.

  • Remove 50% of the position as profit when the price reaches 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

Risk-on sentiment has been dominant in markets over recent days and weeks despite ongoing fears and economic damage caused by the global coronavirus pandemic. This has produced strong long-term bullish trends in relatively risky assets against the safe haven U.S. dollar, and there is no currency these days which acts as more of a “risk” barometer than the Australian dollar.

Yesterday, we saw a short, sharp selloff in riskier currencies. However, not only have we seen the price bounce back quickly here, but also the Aussie seems stronger today than any other major currency against the USD.

These provide good reasons to be bullish on this currency pair, especially if the price breaks above the key resistance level which I have identified at 0.7740. This level has already acted as a bearish double top, so I see it as likely to be pivotal today.

I will be happy to take a long trade if we get two consecutive hourly closes above 0.7740 later, or if we see a bullish bounce at any of the three nearby support levels I have identified above.

AUD/USD chart

There is nothing of high importance scheduled today regarding the AUD. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3 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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