AUD/USD Forex Signal: Consolidating Between $0.6740 And $0.6670

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.

My previous signal on 3^rd 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.

(Click on image to enlarge)

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.

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