The support at $0.6816 looks interesting.
My previous recommendation on November 28 gave an excellent and well profitable sell trade from the downside hammer candle rejection of the resistance level I identified at $0.6723.
Today’s recommendations for trading the AUD/USD currency pair
- risk 0.75%
- Trades may only be entered before 5pm Tokyo time on Friday.
Sell trading ideas
- Take a sell trade after the bearish price action reverses on the H1 time frame right at the next touch of $0.6953 or the upper trend line of the pennant formation plotted inside the price chart below.
- Set the stop loss one pip above the local swing high.
- Set your stop loss order to break even once the trade is 20 pips in profit.
- Take 50% of the position as profit when the price reaches 20 pips in profit and let the rest of the position run.
Buy trade ideas
- Take a long trade after the bullish price action reversal on the H1 timeframe right at the next touch of $0.6816, or the lower trend line of the pennant formation drawn inside the price chart below, or $0.6739.
- Set your stop loss 1 pip below the local swing low.
- Set your stop loss order to break even once the trade is 20 pips in profit.
- Take 50% of the position as profit when the price reaches 20 pips in profit and let the rest of the position run.
The best way to identify a classic “price action reversal” is to close an hourly candle, such as a pin bar, doji, outside candle or even just an engulfing candle with a higher close. You can exploit these levels or areas by observing the price action that occurs at the specified levels.
Analysis of trading the AUD/USD currency pair
I wrote in my previous forecast that AUDUSD was broadly consolidating with a lot of price action, between the extremes of $0.6600 to $0.6800.
I thought the support at $0.6624 or the resistance at $0.6816 could be good levels to find big reversals.
This was a good guide for what happened over the following days, with support at $0.6624 not being reached again, and the price only recently decisively breaking above $0.6816 which now looks like it has become a major support level.
This currency pair tends to rise or fall according to risk sentiment, and the past 24 hours were no exception, as the price fell based on US Federal Reserve forecasts at rates above 5% in 2023.
Despite the decline, the technical picture still looks quite to the upside, with a valid trend to the upside in the medium term, although the trend is a bit weak.
We also see a pennant flag pattern to the upside within the price chart, but the price is showing more hints that it will break down and invalidate the downtrend. However, the support at $0.6816 is still very important, so a long trade from the retracement there, or lower on the lower trendline, could be attractive.
Graph generated by platform TradingView
Concerning the US dollar, there will be a release of retail sales and the Empire State Manufacturing Index at 1:30pm London time. There is nothing expected today regarding the Australian Dollar.
Are you ready to trade free daily forex trading signals? We have shortlisted the best forex brokers in the industry for you.
Follow the recommendations of various currencies on a daily basis through our dailyforex website