AUD/USD Forex Signal: Testing Support at $0.6719
Today’s AUD/USD Signals:
Risk 0.75%
Trades must be taken before 5 pm Tokyo time Wednesday.
Short Trade Ideas:
- Go short on the next touch of $0.6786 or $0.6847 following a bearish price action reversal on the H1 time frame.
- Set the stop loss one pip over the high of the current swing.
- Once the trade is 20 pip in the green, adjust the stop loss to break even.
- When the price reaches 20 pip profit, remove 50% of the position as profit and let the remaining 50% run.
Long Trade Ideas:
- When the price touches $0.6719, $0.6679, or $0.6624 after a bullish price action reversal on the H1 time frame, you should immediately go long.
- Set the stop loss one pip below the current swing low in the area.
- Once the trade is 20 pip in the green, adjust the stop loss to break even.
- When the price reaches 20 pip profit, remove 50% of the position as profit and let the remaining 50% run.
The best way to spot a classic "price action reversal" is for an hourly candle to close with a higher close than usual, such as a pin bar, doji, outside, or even just an engulfing candle. By observing the price action that takes place at the indicated levels, you can exploit these levels or zones.
AUD/USD Analysis
Based on the crucial support level at $0.6719 in the price chart below, the technical picture today suggests the beginning of the second shoulder of a bullish head and shoulders chart pattern. Although risk sentiment generally discourages a rise in this pair, it made some progress yesterday and may benefit from data releases that are scheduled for later today.
The $0.6719 support level now appears to be crucial. If it holds, the price will probably rise to the neckline at the large quarter-number of $0.6750. If that level is breached, the price should rise further to the following resistance level at $0.6786.
A bearish breakdown below the pivotal support at $0.6719, however, would represent a bearish failure of the bullish head and shoulders chart pattern, and it could uncover many stops and likely send the price plunging, especially if it is accompanied by a renewed risk selloff in the wider market.
This would represent the most exciting trade opportunity. The price will probably keep falling until it reaches at least $0.6679 if we later see two consecutive lower hourly closes below $0.6719.
The release of Australian CPI (inflation) data later in the Sydney session could be crucial, particularly if it turns out to be much lower than the forecasted annualized rate of 8.1%, as such a lower number would probably send the price here lower.
At 3 p.m. London time, CB Consumer Confidence data will be released about the USD. The CPI (inflation) data for the Australian dollar will be released at 12:30 am.