My previous signal on 3rd January was not triggered.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be entered before 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 $0.6737, $0.6754, or $0.6775.
- 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6671, $0.6654, or $0.6634.
- Place 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 in my previous forecast almost one week ago that the AUD/USD currency pair was falling but running out of momentum. The fall was driven by a widespread advance in the US Dollar, which was against the long-term trend.
I thought the trade to watch out for would be two consecutive hourly closes above $0.6775, but in fact the price fell during most of the day before regaining some ground.
There has been no dramatic change in the technical picture – we continue to see a slowing of bearish momentum, which may now have slowed down to become a neutral consolidation. The price chart below shows that for several days the price has effectively been ranging without bias between $0.6671 and $0.6737.
The best approach today will likely be to trade reversals at either extreme, and just play the range.
However, the Aussie is quite weak, and may become even more so later today if inflation data comes in even lower than the expected 4.4.% annualized rate.
Regarding the AUD, there will be a release of CPI (inflation) data at 12:30am London time. There is nothing of high importance scheduled today concerning the USD.
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