AUD/USD Forex Signal: Bearish Price Channel Continues

AUD/USD Forex Signal: Bearish Price Channel Continues

My previous AUD/USD signal last Tuesday was not triggered, as none of my key support or resistance levels were reached that day.

Today’s AUD/USD Signals

• Risk 0.50%
• Trades may only be entered prior to 5pm Tokyo time Wednesday.

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Short Trade Ideas

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6237 or $0.6256.
• 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.
• Remove 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

• Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6172, $0.6132, or $0.6077.
• 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.
• Remove 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

In my previous forecast, I thought that the price was likely to continue to fall due to markets being in the grip of risk-off sentiment. I was right over the longer term, although the price did little that day. I saw a short below $0.6300 as likely to be a good trade if it set up, and when the price rejected this level from below last Thursday it did produce a nice shorting opportunity.

In today’s AUD/USD forecast I predict that the AUD/USD currency pair is likely to continue falling, due to the following factors:

• Markets are in the grip of strong risk-off sentiment, fuelled by President Trump’s statement yesterday that tariffs are starting today on Mexico and Canada next week, and will be raised from 10% to 20% on China soon. The China factor is helping to depress the Aussie a bit, but it is more its status as a classic “risk-on” currency that is seeing it trade lower.
• Technically, we have a bearish linear regression analysis displayed within the price chart below, that looks likely to continue to guide the price lower. This bearish price channel has continued, although it has widened. However, it should be said this is not the cleanest channel pattern, so it might be a bit unreliable.
• The US Dollar has regained a bid due to the new tariffs and as a currency that typically flourishes in a risk-off environment. We again see the greenback in a valid long-term bullish trend.

Although bears seem to have the upper hand, there is a demand zone below where we have seen strong buying recently, just below $0.6200. In fact, this could be a bullish double bottom. The very short-term price action is also bullish as I write, and the price may be getting established above

I would take a short trade from a bearish reversal following a retracement to either of the two nearest resistance levels.

There is nothing of high importance due today concerning the USD. Concerning the AUD, there will be a releases of Australian GDP data at 12:30am London time.

  EURUSD Chart by TradingView

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