Aussie Running Out of Bullish Momentum

Resistance seems strong in $0.6850 area.

My previous signal last Monday produced a small winning trade from the bullish rejection of the support level which I identified at $0.6794.

Risk 0.75%

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

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6851, $0.6877, 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.

• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6797, $0.6781, 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 last Monday that the AUD/USD currency pair was not showing real momentum and was in a comfortable area.

I thought that there may be an opportunity for a scalp off the support level at $0.6794 if it was reached but it would be wise to be conservative with taking profits from that if it sets up.

This was a very good, accurate call as this opportunity did set up, but only gave about 30 pips of profit, as I warned was likely.

The technical picture now is not much changed, despite the Australian Dollar being the biggest gainer of today’s Asian session, which pushed the price up to near the resistant area at $0.6850. The Aussie seems to have run out of bullish momentum here and is making a bearish retracement.

As the price is still trading within a comfortable area, I think it is likely to not show much direction, so all we really must work with here are potential bounces as support or resistance levels.

I have a minor long bias, as I think that rising stock markets are going to eventually send the Aussie higher.

I will look for a scalp if we get some kind of bullish bounce following a retracement to $0.6797 as it is confluent with a round number and my minor long bias.

Concerning the USD, there will be a release today of Unemployment Claims data at 1:30pm London time. Regarding the AUD, there is nothing of high importance scheduled today.

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