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Price has room to fall to the 0.6800 area.
My previous signal last Monday produced a profitable long trade from the bullish rejection of the support level at 0.6882, but it barely gave the minimum 20 pips of profit so would have broken even in practise.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be entered prior to 5pm Tokyo time Tuesday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6884 or 0.6953.
- 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 0.6797 or 0.6784.
- 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 August that although the AUD/USD currency pair was rising, the price would probably turn bearish again later, not being able to get established above 0.6964.
This was a relatively good call as the dominant price movement for the day was downwards and the price never even reached 0.6964.
The Aussie stood out last week as the only major currency which ended the week slightly higher than the strong US Dollar. However, this currency pair fell sharply in favour of the Dollar just like every other pair did Friday after Powell’s hawkish speech at Jackson Hole strongly boosted the greenback, which has continued to advance since this week’s open. Interestingly, the Aussie has falled during Monday’s Asian session just as strongly as most other currencies, which suggests that any residual strength in the Aussie is being wiped out.
We have bearish momentum and this may slow down or even reverse, however the odds have to be that nothing will change sentiment and we will see further gains by the US Dollar later. The price here has room to fall, with no obvious key support levels until the round number at 0.6800.
I see a short trade from a bearish reversal following a bullish retracement to at least 0.6875 as potentially the most attractive trade setup we might see here today.
There is nothing of high importance due today regarding either the AUD or the USD.
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