My previous AUD/USD signal last Tuesday produced a profitable short trade from the bearish doji reversal at the resistance level of $0.6237.
Today’s AUD/USD Signals
- Risk 0.50%
- Trades must be taken before 5pm Tokyo time Wednesday.
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6285, $0.6328, or $0.6365.
- 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 $0.6237 or $0.6172.
- 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.
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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 forecast, I thought that the price was likely to continue to fall due to markets being in the grip of strong risk-off sentiment and a technical bearish trend remaining in play. This was not a good call, as the price failed to fall to a new low, and then at the end of the day it made a bullish breakout. However, my forecast was good enough for a small but profitable short trade.
In today’s AUD/USD forecast I predict that the AUD/USD currency pair is likely to rise over the short term, due mainly to US Dollar weakness:
- Markets are in the grip of strong risk-off sentiment but are most negative on the US Dollar and US stock markets, all of which are suffering drops in value. This is due to the new tariffs which the Trump administration has placed on Canada, Mexico, and China, which show no signs of being removed as none of these countries have moved forward to offer a deal to the Trump Presidency. This is stoking fears of inflation and a drop in economic growth, with recent Fed data hinting that US GDP might have started contracting.
- Technically, the resistance level at $0.6285 looks pivotal, and the price has started the London session trading above it, although not by much. If the price can hold up above this level, it will be most likely to continue advancing towards the next resistance level at $0.6328.
- It is worth noting that the Australian Dollar is not a relatively strong currency – this recent round of US Dollar weakness is benefiting European currencies like the Euro and the British Pound the most. This is because the Aussie is a risk barometer and as an exporting nation, an ongoing trade war puts Australia in a questionable position, with the potential for new US tariffs on Australian imports.
It is possible that the nearest round number overhead at $0.6300 could also provide resistance.
There is nothing of high importance due today concerning the AUD. Regarding the USD, there will be a release US JOLTS Job Openings data at 2pm London time.
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