SIGNAL FOREX

AUD/USD Forex Signal: Aussie Hit Hard – DailyForex.com


AUD/USD: Hitting cluster of support above big round number at 0.7000

Yesterday’s signals may have produced a long trade late in the Asian session from the small bullish bounce at 0.7035. This is a very speculative trade and is only worth staying in if you are aiming for a high reward to risk ratio but prepared to accept the trade will probably fail.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be entered between 8am New York time Thursday and 5pm Tokyo time Friday.

Long Trade Ideas

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.7035, 0.7016, 0.7004, or 0.6963.
  • Place the stop loss 1 pip below the lowest recent price.
  • 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 trade is 20 pips in profit and leave the remainder of the position to ride.

Short Trade Ideas

  • Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.7117 or 0.7139.
  • Place the stop loss 1 pip above the highest recent price.
  • 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 trade is 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.

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AUD/USD Analysis

I wrote yesterday that the price had a long way to fall below 0.7121 as there were no key support levels until 0.7034 just above the very big round number at 0.7000.

I was prepared to take a bearish bias if we had gotten two consecutive closes below 0.7121 (0.7100 would be even better) after New York opened, and hope to ride that down to 0.7050 – the half number a few pips above the support at 0.7034, for some safety.

This was an excellent, profitable call as we got those bearish closes below 0.7121 and 0.7100 and the entry point gave 37 pips of profit. In fact, the downwards movement continued all the way to the support level at 0.7034 where the price seems to have found some support over recent hours.

Taking a long trade here is brave but may have long-term potential and suit a high reward to risk target trading profile. We may see a medium or long-term bullish trend change now, as the price is so close to the very psychologically significant round number at 0.7000, and there are a cluster of support levels just above 0.7000 starting at 0.7035.

For anyone else not looking for a speculative long-term trend, it will probably be wise to stand aside from trading this currency pair today.

AUDUSD

Regarding the AUD, there is nothing of high importance due today. Concerning the USD, the Chair of the Federal Reserve and the Treasury Secretary will be testifying before Congress at 3pm London time.

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