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AUD/USD Forex Signal: More Bearish Below 0.7200 - DailyForex.com

Price action remains choppy ahead of US CPI tomorrow.

My previous AUD/USD signal yesterday may have produced a losing long trade from the bullish price action bouncing off the support level I had identified at 0.7189, although I did warn this level looked very unreliable.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be taken prior to 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 0.7223 or 0.7302.
  • 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 Trade Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7177 or 0.7123.
  • Put 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.
  • 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.

AUD/USD Analysis

I wrote yesterday that I had little faith in 0.7189 as a support level. This was a good call as although this level held up for a few hours it was quickly broken. However, I did express a lot of doubt about being long of any “risky” assets yesterday such as the Australian Dollar as I foresaw a potential souring of risk sentiment and we did see this in the market yesterday, although stock markets recovered their initial losses later in the day.

Although there is an obvious technical support level at 0.7177, this level again looks very unreliable. Instead, the price chart below shows a succession of lower highs, with the area around the round number at 0.7200 again acting as resistance. Bulls have a little hope as there has recently been a higher low, but I think overall I must call the technical picture as basically weakly bearish. Unfortunately, I do not see any likely trade opportunities here today, but I would say that if the price gets established below 0.7177 it will probably fall to 0.7150 at least.

A long trade from a bullish bounce t 0.7123 if reached would look attractive.

AUD/USD Signal

There is nothing of high importance scheduled today concerning either the AUD or the USD.