AUD/USD Forex Signal: Aussie Bullish in Risk-On Market

Adam Lemon

0.7816 is likely to be today’s pivotal point.

Last Thursday’s AUD/USD signals produced a nicely profitable long trade from the bullish turn at the key support level I had identified at 0.7696.

Today’s AUD/USD Signals

Risk 0.75%

Trades must be taken after 9am New York time.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7816, 0.7862, or 0.7884.
  • Place 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 0.7737 or 0.7696.
  • Place 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 Thursday that although it was likely that bearish sentiment would persist for at least a few more days, the price chart suggested that we would be likely to consolidate just above 0.7696 or even rise slightly.

I was correct to identify this level and the zone below it as likely to be pivotal, and we saw a much faster and stronger bearish reversal from this level.

The USD is weak everywhere and risk sentiment has recovered firmly. Provided this environment persists, the price of this currency pair is more likely to rise than fall.

Technically, the price is reaching another pivotal point at the price of writing – the resistance level at 0.7816, although this level is likely to be uncertain as it could be a bit higher. We may well see a short or medium-term bearish reversal around 0.7816 – 0.7825 soon. Alternatively, if the price gets established above this zone, it will be likely to continue to rise over the short-term.

I will take a bullish bias if we get two consecutive higher closes above 0.7825 today.

AUD/USDThere is nothing of high importance scheduled today concerning either the AUD or the USD.

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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