My previous AUD/USD signal last Tuesday produced a profitable short trade from the bearish reversal at the resistance level identified at $0.6368.
Today’s AUD/USD Signals
- Risk 0.50%
- Trades must be taken 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 $0.6365, $0.6392, or $0.6404.
- 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.
- Take off 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 1H1 time frame H1H1H1 time frame immediately upon the next touch of $0.6310 or $0.6233.
- 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.
- Take off 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
In my previous forecast, I thought that the price was likely to rise due to bullish momentum, a weaker US Dollar, and an improving risk appetite. There was an initial rise during the day, but it reversed and ended quickly, so this was not a great call. The best trade of the day was a short from the nearest resistance level.
In today’s AUD/USD forecast I predict that the AUD/USD currency pair is likely to continue falling, due to the following factors:
- Markets are in the grip of strong risk-off sentiment, fuelled by President Trump’s statement yesterday that tariffs would be imposed on Mexico and Canada next week, and that restrictions would be imposed on Chinese investment. The China factor is helping to depress the Aussie a bit, but it is more its status as a classic “risk-on” currency that is seeing it trade lower.
- Technically, we have a bearish linear regression analysis displayed within the price chart below, that looks likely to continue to guide the price lower.
- The US Dollar has regained a bid due to the coming tariffs and as a currency that typically flourishes in a risk-off environment.
Although bears seem to have the upper hand, there is a support level close by at $0.6328 which has been proven. This may be an obstacle, or at least a temporary one. It is hard to see a good breakdown point, because there is then another support level close below that at $0.6310.
I would take a short trade from a bearish reversal following a retracement to $0.6365, which is not likely to set up. Alternatively, bears will be quite clear to short this pair once the price gets established below the round number at $0.6300, which looks like a better bet.
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