Price has room to fall to $0.6570.
My previous signal on 15th September was not triggered, as none of the key support or resistance levels which I had identified were reached that day.
Today’s AUD/USD Signals
Trades must be entered prior to 5pm Tokyo time Thursday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6694, $0.6746, or $0.6769.Place the stop loss 1 pip above the local swing high.Move the stop loss to break even once the trade is 20 pips in profit.Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6570.Place the stop loss 1 pip below the local swing low.Move the stop loss to break even once the trade is 20 pips in profit.Remove 50% of the position as profit when the price reaches 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.
I wrote in my previous forecast last Thursday that the AUD/USD currency pair was looking bearish as the resistance level nearby at 0.6769 stood out, with the price already falling from there after a recent touch. I thought that the price could fall to at least $0.6700.
This was a good call as the price fell over the day.
The Forex market is currently dominated by a strong bullish trend in the US Dollar, with the Dollar Index close to its multi-year high again. The weakest major currencies have been the commodity currencies except the Australian Dollar, and we have seen the New Zealand and Canadial Dollars fall to record lows. The Australian Dollar was firmer, but we are now seeing it start to sell off and join its fellow commodity currencies in breaking to new multi-year lows against the greenback.
Technically, the price is now ready to fall all the way to at least the next support level at $0.6570, so a short trade from another rejection of the resistance level at $0.6694 looks very attractive.
However, there is a very major event due later today that can reverse sentiment and overpower any technical factors – the FOMC Federal Funds Rate and Statement. There is often a lot of volatility at the time and shortly after this release, so be very careful in having any open trades at this point.
I think it is quite likely that the price will refuse to drop by much during today until this release, when it could easily plummet to $0.6570 and beyond.
Regarding the USD, there will be releases of the FOMC Statement, Federal Funds Rate, and Economic Projections at 7pm London time. There is nothing of high importance scheduled today concerning the AUD.