AUD/USD Signal Today - 01/07: Bullish Consolidation (Chart)
(MENAFN- Daily Forex) My previous signal last Wednesday
was not triggered, as none of the identified support or resistance levels were reached that day's AUD/USD Signals
Risk 0.75% Trades may only be entered prior to 5pm Tokyo time Tuesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6685, $0.6737, or $0.6775. 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 $0.6660, $0.6651, or $0.6636. 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 in my previous
AUD to USD forecast
on 26th
June that the
AUD/USD currency pair
was showing some short-term bullish momentum driven by the release of higher than expected CPI (inflation) data a few hours earlier. However, I had thought that the day's opportunity to enter a long trade had already passed.
This was a good call insofar as I was right that the long trade opportunity had already passed, but the bullish momentum had already stalled. The real opportunity that day was a short trade from the bearish reversal at what has since become a key resistance level at $0.6685.
The technical picture remains one of a bullish consolidation coiling below this strong resistance level at $0.6685. As the level has been holding for a while, an eventual bullish breakout might be strong. However, the problem with expecting much direction movement in this currency pair is that both currencies are strong, with the US Dollar and the Australian Dollar each enjoying a long-term bullish trend. On the other hand, there are many support levels packed close by just below the current price action, which is a bullish sign.
Due to the residual strength in both currencies, the only thing I can say with much confidence is that the resistance level at $0.6685 is likely to be today's pivotal point. That means that there could be a chance for a short trade if it is tested and holds as resistance, or a long trade if we get two consecutive higher hourly closes above it.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.
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