AUD/USD Forex Signal: New 3-Month Low Prices

Adam Lemon

There is still room for the price to fall to 0.7500.

Last Tuesday’s AUD/USD signals were not triggered, as there was no bullish price action when the support level identified at 0.7614 was first reached.

Today’s AUD/USD Signals

Risk 0.75%.0.7668

Trades must be entered prior to 5pm Tokyo time Friday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7585 or 0.7623.

  • 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 0.7498 or 0.7485.

  • 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 the technical picture was still one of consolidation, with a key range between 0.7668 and 0.7614.

I thought that if the price again pulled back to the area at or very close to 0.7668 then made a firm bearish reversal, this could be a good short trade set up.

This was a relatively good call as although the resistance level at 0.7668 was not reached, I was correct about looking to the short side.

The technical picture now is one of short-term consolidation without any bearish momentum but with plenty of room remaining for the price to fall to the very psychologically important round number at 0.7500.

The Aussie has shown a great deal of relative weakness over recent days, rivalling the currencies showing longer-term weakness such as the euro and the Australian dollar. There is no doub,t however, that the Forex market is being primarily driven by strength in the U.S. dollar.

I am prepared to take a short trade from a bearish reversal which might set up later at 0.7585 in line with the long-term trend. I am also prepared to take a long trade from a bullish bounce at 0.7500 as it is such a key level, but I would monitor any long trade carefully on a short-term time frame.AUD/USD

There is nothing of high importance due today regarding the AUD as it is a public holiday. Concerning the USD, there will be a release of CB Conumer Confidence data at 3pm 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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