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My previous signal on 19th October produced a profitable short trade from the bearish rejection of the resistance level I identified at 6351's AUD/USD Signals
Risk 0.75%
Trades
must be taken before 5pm Tokyo time Thursday Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6391. 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 $0.6358, $0.6346, or $0.6278. Put 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/USD Analysis
I wrote in my previous forecast last Thursday that the AUD/USD currency pair was close to making a new 1-year low by threatening to make a bearish breakdown below the key support level at $0.6278. However, this bearish breakdown did not happen, with the price staging a weak recovery instead along with risk sentiment in the market generally.
The price action over the past week or so has been consolidative rather than significantly bullish, but the refusal to fall below a long-term low might indicate that a major long-term inflection has happened as the start of a bullish reversal.
The price recently made a bearish double top chart pattern as it again rejected the strong resistance level at $0.6391. If reached again, especially if it happens later in the day, followed by another bearish reversal, it could make a good short trade entry. This line looks likely to be today's pivotal point. If the price does manage to get established above it, the outlook would become more bullish and the price could run a lot higher before running into the next resistance level, which is above the big round number at $0.6500.
A fundamental factor behind the bullish case is the Australian CPI (inflation) data released earlier today, which showed Australian inflation running meaningfully hotter than was expected, slightly increasing expectations of further rate hikes over the near to medium-term, which earlier made the Australian Dollar the strongest major currency of the Asian session. However, if the price remains below $0.6391, it will show that markets are not seeing this as a significantly hawkish surprise for the Aussie.
It also needs to be said that the support level below at $0.6346 looks likely to be strong, so there could be a bullish scalp possible later from a rejection of that level, especially if the half number at $0.6350 is rejected firmly and simultaneously.
Regarding the AUD, the Governor of the RBA will be testifying before Parliament at 11pm London time. There is nothing of high importance due today concerning the USD.
Ready to trade our daily Forex signals ? Check out this list of the best Australian Forex brokers .
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