AUD/USD Forex Signal: Sells Off After RBA Release

Adam Lemon

Last Thursday’s AUD/USD signal produced a profitable short trade entry from the bearish rejection of the resistance level I identified at 0.7548.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only 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 0.7513, 0.7534, 0.7548, or 0.7569.

  • Place 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7437 or 0.7408.

  • Place 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 Thursday that I continued to doubt whether the price could get much higher over the short term.

I thought the best approach was to wait for the price to reach either 0.7550 or 0.7600 and enter a short trade if there is an attractive bearish reversal.

This was a great call as the high was made that day at about 0.7550 and it has held since, giving good potential for a profitable short trade for traders with a little patience.

The price has fallen firmly in recent hours since the RBA’s policy release, which in fact produced a more hawkish tilt as the yield curve target was abolished, meaning monetary policy will be a little tighter. This would normally be expected to boost the AUD, but the opposite has happened. Sometimes policy releases are a catalyst for price movement even if its not in the logical direction, and that is what seems to have happened here.

At the time of writing, after falling from the resistant area above 0.7500, the price may be finding support at about 0.7475 but this looks doubtful – it is too early to call what will happen here, but I have removed this support level from the chart. If the price can get established below 0.7475 over the coming hours, it has a good chance to keep falling to the next support level at 0.7437.

AUD/USD

There is nothing of high importance scheduled for release today egarding 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.