My previous signal last Thursday was not triggered as none of the key support or resistance levels were reached that day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades may only be entered before 5pm Tokyo time Friday.
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Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6192, $0.6207, or $0.6218.
- 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.
- Remove 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6166, $0.6126, or $0.6102.
- 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.
- Remove 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 in my previous AUD/USD forecast last Thursday that the AUD/USD currency pair was looking likely to fall further due to the strong long-term bearish trend in this currency pair and the reasons why the Aussie is weak, and the greenback is strong.
This was a good call overall as the price has continued to decline over the past week. However, I was looking for a short trade from $0.6300 and this did not set up.
The technical and fundamental situations are unchanged, with the US Dollar remaining strong within a long-term bullish trend, while the Australian Dollar continues to weaken, fuelled by higher-than-expected Australian CPI (inflation) data released yesterday which ticked higher to an annualized rate of 2.3%, and poor sales data released earlier today.
The price has fallen close to a 4-year low price, which will be reached if the price goes lower than $0.6170. Trading below that level would be very significant “blue sky” and could trigger a drop to as low as the big round number at $0.6000.
The price chart below shows a long-term linear regression analysis applied to the price action, exhibiting a strong and quite steep bearish trend which respects the 2 standard deviations boundary of this indicator.
All signs point towards a continuing fall here but was out for potential support at $0.6170.
I will be happy to enter a new short trade following a bearish rejection of $0.6192.
There is nothing of high importance due today concerning either the AUD or the USD.
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