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My previous AUD/USD signal on 8th September gave a losing short trade from the bearish rejection of the resistance level at $0.6595.

Today’s AUD/USD Signals

Risk 0.25%
Trades may only be taken before 5pm Tokyo time Friday.

Short Trade Ideas

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6619 or $0.6657.
• 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.
• Take off 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

• Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6595, $0.6589, or $0.6569.
• 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.
• Take off 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

In my previous AUD/USD forecast last Monday, I wrote that the risk-on bullishness was not very strong, but it is likely to last until at least the release of US CPI (inflation) data. I thought that $0.6569 might make a good entry point for a new long trade entry.

I was correct to take a bullish bias over the past few days, but the price never got back to $0.6569.

The Australian Dollar has been the top performing currency of this week so far, but attention will now shift towards the US Dollar as we get US CPI (inflation) data later today. Yesterday’s PPI data which showed a decline suggests we might get a surprise to the downside on inflation today. If so, this will send the price of this currency pair higher for sure, in line with stock markets which will also get a boost.

If you can face the volatility of the CPI data, there is quite likely to be a long trade set up which technically looks very attractive at a confluent point between the lower trend line of the ascending price channel shown within the chart below, and the horizontal resistance level at $0.6595. Note that the round number at $0.6600 is also part of this confluent area. If you have a longer-term bullish outlook here, this could make a great trade entry.

For other traders, waiting for the US inflation data and then trying to day trade the short-term reaction could be a good strategy here. There is more volatility in the AUD and the USD than there is in most other currencies right now.
 

There is nothing of high importance scheduled today concerning the AUD. Regarding the USD, there will be a release of US CPI (inflation) and Unemployment Claims data at 1:30pm London time.

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