AUD/USD Forex Signal

AUDUSD analysis: Bearish break below 0.6940

Yesterday’s signals may have produced a long trade from the tiny bullish candlestick which rejected the support level of 0.6904 late in the Asian session. I think it would be wise to close such a trade for the small floating profit immediately as the bullish bounce here does not look very strong or reliable.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be entered between 8am New York time Thursday and 5pm Tokyo time Friday.

Long Trades

• Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.6904, 0.6901, or 0.6882.

• Place the stop loss 1 pip below the local swing low.

• Adjust the stop loss to break even once the trade is 20 pips in profit.

• Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

Short Trade

• Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.6940.

• Place 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.

• Remove 50% of the position as profit when the trade is 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 yesterday that although the support at 0.6940 was making its presence felt gently, the lack of movement was probably a natural consolidation ahead of major data releases for both sides of this currency pair which we will get over the next 24 hours.

Due to the uncertainty of these releases, I did not have any directional forecast, but I saw a bullish reversal somewhere between 0.6900 and 0.6940 as the most probable directional outcome.

This was a relatively good call as we got this bullish bounce just above 0.6900 but I am not very confident that the price will run bullishly from here. Commodity currencies are generally weak against the USD right now and the AUD is the weakest such currency of all, with this pair currently sitting in a long-term bearish trend.

I think a break below 0.6900, if it is sustained, will see a further bearish move down to 0.6882. There, the price would be very close to long-term lows, which is a further bearish sign.

The round number at 0.6900 looks extremely likely to be today’s pivotal point.There is nothing important due today concerning either the AUD or the USD.