My previous signal last Thursday was not triggered, as there was no bearish price action when the resistance level at $0.6539 was first reached.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades may only be taken 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 $0.6456, $0.6345, or $0.6299.
- 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 $0.6391, $0.6345, or $0.6299.
- 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 in my previous forecast on Thursday last week that the AUD/USD currency pair was likely to remain consolidative between $0.6500 and $0.6561. I was looking for a potential short trade from a reversal off the latter level.
This was a good call, as the price did remain between these two levels over the day, although the resistance level at $0.6561 was not quite reached.
The technical picture now is considerably more bearish, with the price falling quite hard to trade at a new 5-month low price, so we do see a serious trend backed by market sentiment, which is definitely risk-off right now. In fact, this currency pair is in the market’s focus, because nothing has fallen as hard as the Australian Dollar, which is always a key risk barometer.
Markets are worried about a war between Israel and Iran, the pace of Federal Reserve Rate Cuts, and poor Chinese economic data released a few hours ago. These factors are strengthening the US Dollar and weakening the Aussie.
Technically, we continue to see short-term bearish momentum. The price looks as if it will continue to $0.6391 before reaching any resistance levels so the opportunity to trade short and catch the current move may be over already. It might be best to wait for a new bullish retracement and then try to enter short from $0.6456 or even $0.6440.
There is nothing of high importance due today regarding the AUD. Concerning the USD, Fed Chair Jerome Powell will be speaking at a forum at 6:15pm.
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