AUD/USD Forex Signal: Bullish Break Beyond 0.7816

Adam Lemon

Support at 0.7816 likely to be today’s pivotal point.

Last Thursday’s AUD/USD signals produced a losing short trade from the bearish rejection of the resistance level identified at 0.7756.

Today’s AUD/USD Signals

Risk 0.75%

Trades must be taken before 5pm Tokyo time Wednesday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7884 or 0.7950.
  • 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 0.7816, 0.7792, or 0.7756.
  • 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 Thursday that the technical picture had become dominated by a symmetrical bearish price channel, which suggested that the price was likely to move lower. I was looking to enter a short trade from a bearish reversal at 0.7756 as the area was confluent with the upper trend line of this bearish price channel.

The short trade did set up but quickly turned into a loss as the price continued to rise. This was the start of an important bullish breakout from the price channel and saw the price eventually break above the long-term resistance level at 0.7816, which now seems to be holding firmly as support. So, although I was wrong, I did correctly identify a pivotal event.

The technical picture remains bullish if the price holds up above 0.7816.

We have seen the nearest resistance level at 0.7884 hold, so I think that this level remains valid.

U.S. dollar weakness seems to be persisting, although it may be pausing, but I see that as meaning that this currency pair remains a good buy from any bullish bounce at 0.7816, we might get today. I will take a bullish bias if this trade sets up.

AUD/USD

There is nothing of high importance due today regarding 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

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Sample