Home Forex Signals AUD/USD Forex Signal: Narrowing Triangle Above 0.7642 – DailyForex.com

AUD/USD Forex Signal: Narrowing Triangle Above 0.7642 – DailyForex.com

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Bears really need to see the price get established below 0.7642 before they can be confident that buyers will not be likely to step in at any time.

Last Tuesday’s AUD/USD signals were not triggered, as there was no bearish price action when the price first reached the resistance level I had identified at 0.7726.

Today’s AUD/USD Signals

Risk 0.75%.

Trades must be taken prior to 5pm Tokyo time Friday.

Short Trade Idea

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7851.

  • 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 Idea

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7642.

  • 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.

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AUD/USD Analysis

I wrote last Tuesday that the technical picture had become more bullish, and the dominant technical feature in the price chart was the support at 0.7642 – I thought that we would see the price remain above that level but continue to consolidate over the medium term due to the absence of many relevant data releases in this week’s schedule. This was a good call as the price has continued to consolidate in this area and has now formed a narrowing triangle shown within the price chart below.

However, I did think a bullish break above the resistance level identified at 0.7726 would be significant and I was wrong about that.

The narrowing consolidating triangle pattern is dominant now, so traders should not take a bullish bias until the price gets established above the upper trend line which is currently sitting at about 0.7760. A short trade may be taken from a rejection of this trend line but with caution, as bears really need to see the price get established below 0.7642 before they can be confident that buyers will not be likely to step in at any time.

AUD/USD chart

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

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