AUD/USD Forex Signal: Long-Term Consolidation

Both the USD and the AUD are relatively strong currencies right now, which is why the consolidation pattern is continuing.

Last Thursday’s AUD/USD signals were not triggered as there was no bullish price action when the key support level identified at 0.7781 was first reached that day.

Today’s AUD/USD Signals

Risk 0.75%

Trades must be taken prior to 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 0.7753, 0.7767, 0.7800, or 0.7816.
  • 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 0.7737, 0.7696, or 0.7683.
  • 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 we had a clearly ranging, consolidating technical picture, with the price moving between 0.7816 and 0.7697 with wide, clear swings. I saw trade opportunities from reversals at the extremes of the range.

This was a good call and my analysis from Thursday remains valid as there has been no change to the technical situation, with the range continuing to hold.

Late on Friday, the price rejected the lower edge of the range I identified, making a bullish bounce from 0.7697 and rising from there.

Both the USD and the AUD are relatively strong currencies right now, which is why the consolidation pattern is continuing.

The Reserve Bank of Australia released its rate statement a few hours ago, but this had little effect on the price as it did not have much newsworthy impact.

The price chart below shows that bulls and bears are very evenly matched.

Again, I will seek a long trade from a bullish bounce at 0.7696, or a bearish reversal from 0.7816.

AUD/USD

There is nothing of high importance due today regarding 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.