May be finding support near $0.6570.
My previous signal yesterday may have produced a profitable short trade from the bearish reversal at $0.6700.
Today’s AUD/USD Signals
Trades may only be entered before 5pm Tokyo time Friday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6713, $0.6746, or $0.6769.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 $0.6570, $0.6556, $0.6515, or $0.6447.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.
I wrote in my previous forecast yesterday that the AUD/USD currency pair was technically 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 looked very attractive.
I thought such a set up would be most likely to happen after the FOMC Federal Funds Rate and Statement.
This was a good call as the price rose to the round number at $0.6700 confluent with the resistance level which I had identified at $0.6694 and then made a strong bearish reversal, continuing to fall until it reached close to the support level at $0.6570 which I had also identified.
The downwards price movement has really been driven by the US Dollar, which is sweeping away every other currency except the Swiss Franc, so there is not much to say about the Australian Dollar itself. The Fed’s hawkish rhetoric on rates, inflation, and recession has increased risk-off sentiment though, and that is usually bad news for the Australian Dollar as a key risk currency.
The price has just made a new 2-year low, reaching its lowest levels since May 2020 during the coronavirus panic. Therefore, the price is trading in blue sky.
Despite the strong bearish trend, I am not sure that there will be any good opportunties over the short term for another short trade, because the price has now reached an area starting at $0.6570 at which there is almost a cluster of a few support levels, so it may be hard for the price to fall by much more.
Therefore the best opportunity here today will be likely to be a long scalp from any short time frame bullish bounce at $0.6570 which might happen later. Any such trade should be monitored very carefully on a short time frame.
There is nothing of high importance scheduled today regarding either the USD or the AUD.