My previous AUD/USD signal on 29th October may have produced a losing long trade from $0.6589 and a break-even long trade from $0.6564.
Today’s AUD/USD Signals
Risk 0.25%
Trades must be entered before 5pm Tokyo time Wednesday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6620, $0.6542, or $0.6560.
- 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 $0.6494, $0.6463, or $0.6455.
- 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
In my previous AUD/USD forecast last Wednesday, I wrote that the outlook had become more bullish due to the unexpectedly high inflation print showing an annualized Australian CPI of 3.50% putting an effective end to the prospect of any further rate cuts.
I was ready to take a bullish bias today as long as the price held up above $0.6609.
This did not work out so well, although it is true the price was not able to stay above $0.6609 for very long, so that was a bearish sign which correctly predicted the bearish development.
The technical picture now is more bearish, as the price has been falling ever since, and the fall has accelerated in recent hours. The price chart below shows the price making a bearish breakdown below the linear regression analysis descending price channel.
The Reserve Bank of Australia just had a policy meeting and announced it would keep rates on hold and might not cut them again in this cycle. However, markets have already priced this in, and what seems to be the main factor driving the price lower is the stock market selloff which was triggered by poor earnings by Palantir yesterday.
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However, despite the bearishness, the price is showing initial signs of showing support at $0.6494, which in the past has been a very strong level.
I think $0.6494 is likely to be today’s pivotal point. A long from here could be a risky but potentially rewarding trade.
I would be happy to take a short trade if we get two consecutive lower hourly closes below $0.6494 without any significant lower wicks on these candlesticks.
There is nothing of high importance scheduled today concerning either the AUD or the USD.
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