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 can only be submitted before 5pm on Friday Tokyo time.
Short Trade Ideas
- Go short after a bearish price action reversal on the H1 timeframe immediately after the next touch of $0.6192, $0.6207 or $0.6218.
- Place a stop loss 1 pip above the local swing.
- Set the stop loss to be even when 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 rest of the position running.
Long trade ideas
- Go long following a bullish price reversal on the H1 timeframe immediately after the next touch of $0.6166, $0.6126 or $0.6102.
- Place a stop loss 1 pip below the local swing low.
- Set the stop loss to be even when 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 rest of the position to run.
The best method to identify a classic “price reversal” is the close of an hourly candle, such as a pin bar, doji, outside or even just a engulfing candle with a higher close. You can take advantage of 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 looked likely to fall further due to the strong long-term bearish trend in the currency pair and the reason why the Aussie is weak and the dollar is strong.
This was a good call overall as the price continued to decline over the past week. However, I looked for a short trade at $0.6300 and it didn’t work.
Technicals and fundamentals are unchanged, with the US dollar remaining strong within a long-term bullish trend, while the Australian dollar continues to weaken, boosted by yesterday’s higher-than-expected Australian CPI (inflation) data. A 2.3% annualized rate and poor sales data released earlier today.
The price fell close to a 4-year low, which will be reached if the price falls below $0.6170. A trade below that level would be a very significant “blue sky” and could trigger a drop even to the big round at $0.6000.
The price chart below shows a long-term linear regression analysis applied to price action, showing a strong and fairly steep bearish trend that respects the 2 standard deviation limit of this indicator.
All signs point to a continuation of the decline here, but there was no possible support at $0.6170.
I will be happy to enter a new short trade after the rejection of $0.6192.
There is nothing of great importance today about the AUD or USD.
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