SIGNAL FOREX

AUD/USD Forex Signal: Wide Consolidation Continues – DailyForex.com


Last Tuesday’s AUD/USD signals were not triggered, as there was no suitable reversal price action at either of the support or resistance levels which were hit that day.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken prior to 5pm Tokyo time Thursday.

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7776, 0.7800, or 0.7851.
  • 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.
  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7724, 0.7702, or 0.7642.
  • 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.
  • 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.

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 we were seeing a wide, flat consolidation by this currency pair above the very pivotal support level at 0.7642. I was ready to take cautious long trades from bounces at either of the nearby support levels or a short trade from a bearish reversal at 0.7774. This was an OK call as the price was higher at the end of Tuesday, so I was correct to be primarily favouring long trades although none were triggered.

The wide consolidation above 0.7642 has continued, with the gently narrowing consolidating triangle continuing to define the boundaries of the price.

Australian employment data came in broadly in line with expectations, leaving Australia with a slightly lower than expected unemployment rate of 6.6%, which is relatively low for the coronavirus era.

Although the U.S. Dollar is weaker almost everywhere and driving the Forex market, it is interesting that the AUD is not standing out as the strongest currency anymore. This hints at a potential weakening of the Aussie, or at least a return to the very pivotal supportive area at 0.7642.

I am prepared to take a short trade from 0.7800 as we have a confluence there of a round number with the upper trend line of the consolidating triangle. I also see the support confluent with the round number at 0.7700 as likely to be strong so I would take a long trade from a bullish bounce there too.AUDUSDThere is nothing of high importance scheduled today regarding either the AUD or the USD.

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