AUD/USD Forex Signal: Continuing Slow Advance

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My previous signal last Monday was not triggered, as none of the key levels were reached that day, although the low was just a couple of pip above the nearest key support level which I had identified at $0.6404.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be entered before 5pm Tokyo time Thursday.

Short Trade Idea

Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6579.
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

Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6486, $0.6404, $0.6368, or $0.6350.
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.

AUD/USD Analysis

I wrote in my previous forecast that the AUD/USD currency pair was presenting a choppy range, but with a line of least resistance which seemed to be upwards, helped by the four tightly packed support levels close by within approxiamtely 100 pips of the current price.

This was a good call, as the price has risen slowly from an area near the closest support level, and has continued to advance enough to invalidate the former resistance level at $0.6520.

A new higher support level at $0.6486 has been formed and is continuing to hold up. I see this as likely to be today’s pivotal point, but I would not want to take a new short trade below this level. I see it as a great point to enter a new long trade on a bullish bounce off this level, which is happening at the time of writing.

There is little going on in the market so far this week. The US mid-term congressional election results are coming in and suggest that Republicans will take control of the House but maybe not the Senate. Republican gains are likely to help continue the Dollar’s recent weakening, so this environment could help the price here continue to rise slowly, which is another reason to look for a long trade today from $0.6486.

Tomorrow will see the release of US CPI (inflation) data, which is likely to get markets moving, even if the result is not a surprise. It is expected that annualized inflation will fall from 8.2% to 7.9%. If we instead see an increase, this will likely boost the US Dollar.