AUD/USD Forex Signal: Weakly Bearish Consolidation

Adam Lemon

The Aussie is holding up slightly better against the USD than other major currencies.

Last Tuesday’s AUD/USD signals were not triggered, as there was no suitable price action at the key support level identified at 0.7715 before 5pm Tokyo time.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be entered prior to 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 0.7776 or 0.7816.
  • Put 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 0.7732, 0.7715, 0.7677, or 0.7649.
  • Put 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

I wrote last Tuesday that the technical picture was beginning to look more bearish now we were starting to get a wide bearish price channel forming. This was a correct analysis, although the price now is approximately back to where it was one week ago, but the price has spent most of the time trading lower over this period.

The bearish price channel has been invalidated as the price traded meaningfully above the former upper trend line of this channel. However, it can be said that we are still seeing a pattern of lower highs and lower lows in this currency pair, reflecting AUD weakness against a strengthening U.S. dollar.

Today I see the best potential opportunities as being either a short-term long trade from a bullish bounce at the support level identified at 0.7715 (as this would complete a bullish over and under pattern), or a medium-term short trade at either of the resistance levels identified above (especially 0.7776).

AUD/USD

There is nothing of high importance scheduled for 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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