SIGNAL FOREX

AUD/USD Forex Signal: Bearish Trend Line – DailyForex.com


AUD/USD: Mixed picture

Yesterday’s signals produced a losing short trade from the bearish rejection of the resistance level identified at 0.6320.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.

Short Trade Idea

  • Go short following bearish price action on the H1 time frame immediately upon the next touch of the bearish trend line currently sitting at about 0.6375 shown in the price chart below.

  • Put the stop loss 1 pip above the local swing high.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas

  • Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6320 or 0.6250.

  • Put the stop loss 1 pip below the local swing low.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Remove 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.

AUD/USD Analysis

I wrote yesterday that it looked likely that we would see a further fall, and I was ready to take a bearish bias if there were two consecutive hourly closes below 0.6268 which I thought was pivotal.

I was right about the price descending, and also correct to want to wait for two consecutive hours closes below 0.6268 because after getting close to 0.6250 the price direction turned around and rose strongly. It went on to break up above 0.6320 after initially pausing there, and this level may now become new support. However, there is a bearish trend line which can be seen within the price chart below which might well hold the price down.

I think the best opportunity likely to set up here will be a short trade from a third touch of this bearish trend line, as I cannot see this resumption of risk appetite that we are seeing today keep up for much longer in light of the worsening global economic situation, especially for a currency as sensitive to global economic demand as the Australian Dollar.
AUDUSDThere is nothing of high importance due today concerning either the AUD or the USD.

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