AUD/USD Forex Signal: Bulls Looking to 0.7250

The outlook is quietly bullish so anyone in this long trade might well be able to rise it up to the 0.7250 which is psychologically important and likely to be resistant due to its confluence with a natural horizontal resistance level at 0.7254.

AUD/USD: Quietly bullish

Yesterday’s Signals were not triggered, as there was no bearish price action when the resistance level at 0.7197 was reached.

Today’s AUD/USD Signals

Risk 0.75%.

Trades may only be taken between 8 am New York time Tuesday and 5 pm Tokyo time Wednesday.

Long Trade Ideas

  • Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7197, 0.7175, 0.7161, 0.7139, or 0.7121.
  • Put the stop loss 1 pip below the lowest recent price.
  • Move the stop loss to break even once the trade is 20 pips in profit.
  • Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.

Short Trade Ideas

  • Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.7254 or 0.7331.
  • Put the stop loss 1 pip above the highest recent price.
  • Move the stop loss to break even once the trade is 20 pips in profit.
  • Remove 50% of the position as profit when the trade is 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 a bullish breakout above 0.7200 could see some strong momentum and we might reach the 0.7250 area quite quickly following such a breakout. I felt this way due to the breakout from the bearish price channel, which can still be seen within the price chart shown below.

I was ready to take a bullish bias if we had gotten two consecutive hourly closes above 0.7200 later, up to 0.7250.

This was a good call as the price is now about 30 pips higher than it was after the second hourly close above 0.7200, at 0.7204.

The outlook is quietly bullish so anyone in this long trade might well be able to rise it up to the 0.7250 which is psychologically important and likely to be resistant due to its confluence with a natural horizontal resistance level at 0.7254. The stop loss here should be moved up carefully as volatility is quite low, so not all the gains are given back if there is a sudden move down.

I am prepared to take a short trade later from a strong reversal at 0.7254, or a long trade from a second consecutive hourly close above 0.7254.

AUD/USD

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

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.