[ad_1]
The Australian Dollar is continuing to test key resistance confluent with the round number at $0.7000.
My previous signal on 2nd February was not triggered as there was no suitable price action when the key support and resistance levels were first reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be entered before 5pm Tokyo time Friday.
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6988, $0.7072, or $0.7090.
- 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 Idea
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6845.
- 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 that the AUD/USD currency pair outlook was bullish above $0.7130. I thought a long trade from a bounce at this level would be a good trade opportunity.
This was not a good call, as the price quickly broke below that level and then went on to fall sharply over the following days. However, I was correct to see this level as pivotal.
The price is still lower than it was then, but the technical picture is looking bullish again. We have a major higher lower at about $0.6925 which was printed after the price made a bullish head and shoulders chart pattern with a neckline at about $0.6950.
The price is holding up nicely above $0.6950, and is showing some bullish momentum, but is facing what looks likely to be a very tough and clear resistance level at $0.6988 which of course is confluent with the round number at $0.7000.
The price may falter in this area and turn bearish, giving a potential short trade opportunity. On the other hand, if the price makes two consecutive hourly closes above $0.7000 by the end of the first half of today’s New York session, it could be a great signal to enter a long trade.
We do not have any major data releases scheduled today, and in the absence of any data, the price seems to be just see-sawing backwards and forwards between more risk on and more risk off. However, it is true that the long-term trend here is bullish, so that gives more weight to considering a long trade above $0.7000.
There is nothing of high importance scheduled today regarding either the AUD or the USD.
Ready to trade our daily Forex signals? Here’s our selection of the best currency trading platforms in Australia.
[ad_2]