AUD/USD Forex Signal: Weak Recovery Continues

The technical picture now is somewhat more bullish as we have seen the price action print stairstep higher support levels as the US Dollar continues to weaken a bit, while risk sentiment seems to have improved mildly after yesterday’s release of US inflation data.

My previous signal on 5^th September did not trigger any new trade entries.

Risk 0.75%

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

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6456, $0.6480, or $0.6517.
• 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 entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6429, $0.6415, or $0.6403.
• Put 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.

I wrote in my previous forecast that the AUD/USD currency pair was showing bearish momentum, but was unlikely to get established below $0.6385 that day, so that level could have brought a profitable long scalp before eventually breaking down.

I was partially wrong in that the price did spend time below that level over that day, but eventually recovered from that price area.

The technical picture now is somewhat more bullish as we have seen the price action print stairstep higher support levels as the US Dollar continues to weaken a bit, while risk sentiment seems to have improved mildly after yesterday’s release of US inflation data. Together, these factors are slowly pushing the price higher.

Despite the weakly bullish price action, the nearest resistance level at $0.6456 looks likely to be strong, so I see a short trade entry from a bearish reversal which might set up there as the best potential trade today.

However, on the other hand, the three support levels I have identified all look like they could produce a few pips on the first bounce as scalps, so there could also be opportunities there later.

Concerning the USD, there will be releases today of PPI, retail sales, and unemployment claims data at 1:30pm London time. There is nothing of high importance due today regarding the AUD.

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