AUD/USD Forex Signal: Bullish Breakout Beyond $0.6700

My previous signal on 6^th July produced a losing short trade from the early rejection of the resistance level at $0.6687.

Risk 0.75%

Trades may only be entered prior to 5pm Tokyo time Friday.

Short Trade Ideas

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6836, $0.6870, or $0.6895.
• 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 $0.6794 or $0.6744.
• Place 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.

I wrote in my previous forecast that the AUD/USD currency pair would likely see risk-off sentiment evaporate, which meant that a long trade from another touch of $0.6637 followed by a bullish bounce was likely to be the best opportunity which might set up.

This was neither an accurate nor useful call, although it would have been good to avoid the potential short trade from the bearish rejection of a resistance level.

The technical picture now is simply bullish following yesterday’s lower than expected US CPI (inflation) data, which has boosted risk assets such as the Australian Dollar, and triggered a selloff in the US Dollar, with the US Dollar Index now reaching a new 1-year low price.

This is matched technically by the solid bullish breakout beyond $0.6700 and $06800 as well.

We are currently seeing a small bearish retracement. The first thing to watch for is whether the price bounces at $0.6794 or not – if it does, that will be a very bullish sign. If not, then the gains may be slower, and there could still be a buying opportunity at $0.6744.

I will only look for long trades in this currency pair today.Concerning the USD, there will be releases today of PPI and unemployment claims data at 1:30pm London time. There is nothing of high importance scheduled today regarding the AUD.

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