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Resistant Area Just Above $0.6570.
My previous signal on 22nd September was not triggered, as none of the key levels which I had identified were reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken prior to 5pm Tokyo time Wednesday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6517 or $0.6579.
- 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 Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6458, $0.6427, or $0.6393.
- 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.
AUD/USD Analysis
I wrote in my previous forecast on 22nd September that the AUD/USD currency pair was in a strong bearish trend, but I was not sure that there would be any good opportunties over the short term for another short trade, because the price had reached an area starting at $0.6570 at which there was almost a cluster of a few support levels, so it may be hard for the price to fall by much more.
This was a good call for the day, but not for the longer-term, as we saw the price continue to fall strongly over the following days, reaching new multi-year lows.
However, the price has bounced back since the start of last week when the US Dollar peaked, and began to reverse against almost every other currency except the Japanese Yen, and the Australian Dollar was no exception.
A few hours ago the Reserve Bank of Australia surprised markets by hiking its interest rate by only 0.25% to 2.60% when a hike of 0.50% had been widely expected. This stopped the prevailing short-term bullish trend temporarily, but the price is currently bouncing back.
We have seen most major stock markets strengthen over the past day on improving risk sentiment, and this is likely to boost the Australian Dollar.
Technically, the price chart below is dominated by swinging movements within a range from about $0.6400 and $0.6517. The resistance at $0.6517 looks very pivotal, so I think it will be worth waiting for the price to reach either this level, or to return to the support at $0.6393, for the best potential trade setups.
If the price breaks above $0.6517 and closes with two hourly consecutive higher highs above that level, I will be prepared to enter a long trade. If bulls fail at this hurdle and we get a firm bearish reversal, a short trade will be an alternative option.
Concerning the USD, there will be a release of US JOLTS Job Openings data at 3pm London time. There is nothing of high importance scheduled today regarding the AUD.
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