SIGNAL FOREX

AUD/USD Forex Signal: Bullish Wedge Dominates – DailyForex.com


The 0.7400 area may be resistant over the short term.

Today’s AUD/USD Signals

Risk 0.75%

Trades must be entered prior to 5pm Tokyo time Friday.

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7398, 0.7424, or 0.7450.

  • Place 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.

  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7356, 0.7335, or 0.7303.

  • Place 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.

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 last Tuesday that bulls were in the driving seat, with the AUD and NZD advancing strongly. I saw meaningful resistance overhead at 0.7318 but still was looking for a long trade from a bounce at the support level of 0.7280.

This was overall a good call on the direction and momentum as the price has moved higher since then, but the support held lows at about 0.7300 so 0.7280 was never reached. The price easily broke up past 0.7318.

The price is well established within the bullish wedge pattern drawn in the chart below, but I would not put a lot of emphasis on this technical feature. It is enough to say that the AUD is strong and rising firmly and there is no reason yet why this should stop, so best to trade along with it if you are going to trade this currency pair.

Tomorrow brings US non-farm payrolls data which will likely produce a burst of volatility, especially if the result is a surprise, although the NFP these days does not usually provide a great deal of volatility.

In the unlikely event that the price retraces to reach the key support level at 0.7356, I will happily enter a long trade from a firm bullish bounce there.

AUD/USD

Concerning the USD, there will be a release of unemployment claims data at 1:30pm London time. Regarding the AUD, there will be a release of retail sales data at 2:30am.

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