SIGNAL FOREX

AUD/USD Forex Signal: Short-Term Bullish Recovery – DailyForex.com


The pair had made a rebound above the descending trend line after new 7-month low price.

Last Tuesday’s AUD/USD signals produced a nicely profitable long trade from the near-doji pin candlestick which rejected the support level I had identified at 0.7299.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be taken before 5pm Tokyo time Friday.

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7403, 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 0.7367, 0.7342, or 0.7314.

  • 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 the picture was very bearish as the price had continued to fall and was reaching new 7-month low prices and falling with good bearish momentum. I was worried about looking for a bullish reversal at a low as it seemed to be “catching a falling knife” but we did get this bullish reversal at the round number of 0.7300, which just goes to show that if you are going to try to catch a falling knife, doing it at a bounce at a round number can be the most effective tactic.

The technical picture is showing strong short-term bullishness since this reversal, evidenced by the strong bullish candlesticks and the clear and clean break above the bearish trend line shown within the price chart below. We have seen this reversal most strongly in the “risk” currencies and there is no currency “riskier” than the Australian dollar.

I think this currency pair could be a good short-term long trade from a bounce at any of the two nearest support levels, but only over the short term.

AUD/USD

Concerning the USD, there will be a release of unemployment claims data at 1:45pm London time. There is nothing of high importance concerning the AUD scheduled today.

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