Today’s AUD/USD Signal
Short Trade Ideas:
- Consider entering a short position between $0.65207 and $0.65351, where recent intraday lows have confirmed bearish price channels. The daytime highs are sitting at medium levels.
- Set a stop-loss 10 pips above your entry point.
- If your trade hits a profit of 25 pips, it’s important to adjust and potentially eliminate the stop-loss.
- When the price reaches that 25-pip profit, consider taking 50% of the position as profit to manage the remaining position effectively.
Long Trade Ideas:
- If there’s a breakout above $0.65588, which sits 10 pips from today’s high at the top of the bearish price channel, that might be a good entry point.
- Set a 10-pip stop-loss below the entry.
- Even at a profit of 25 pips, make sure to adjust the stop-loss accordingly.
- As with shorts, if the price hits a 25-pip profit, take 50% off the position to balance further actions.
To better identify classic price action reversals, keep an eye on hourly candle closes. Look out for pinbars or doji candles, as well as surrounding higher or outer candles. Monitoring these price actions at designated levels can be particularly beneficial.
Basic Analysis of AUD/USD
Key Economic Data to Consider:
- Australia’s trade surplus came in stronger than expected, with exports rising by 3.3% and imports declining by 1.3%. This brought the surplus to $7.31 billion, well above the anticipated $4.88 billion.
- Today’s ADP report in the U.S. will garner attention, with expectations showing the addition of only 73,000 private sector jobs, down from 104,000 in July. Additionally, be aware of initial unemployment claims and a few other reports, like the Challenger Job Cut Report and unit labor costs.
- The ISM non-manufacturing PMI for August could also have an impact on the U.S. dollar, with predictions for an increase from 50.1 in July to 50.9. It’s worth monitoring the relevant components closely.
- The anticipated expansion of the U.S. trade deficit for July is projected to go from $60.2 billion to $77.7 billion.
So, what’s causing my reservations about AUD/USD following a recent breakout and reversal?
Bearish price channels have been predominant, leading me to predict potential downsides. A previously taken long position has left me nearly neutral in profit terms, yet I’m opting to sell again given the ongoing bearish price activity. If the price breaks below the rising 61.8% Fibonacci retracement level, it may intensify the current trend.
Interestingly, the Bullbear power indicator has been trending downward for eight hours, with a recent six-hour stretch in bearish territory. This currency pair has been moving lower amid bearish price channels, and trading volume reflects that increasing bearish sentiment.
Anticipating weak U.S. economic data could push AUD/USD higher and create spikes in volatility. Should the price action remain below the 50.0% Fibonacci Retracement level, a short position seems plausible. Forex traders may capture gains of 25-40 pips from this approach.
Today, there isn’t significant news from Australia. For the U.S. dollar, data changes regarding ADP non-farm employment are expected to be released at 1:15 PM London time, followed by unemployment claims 15 minutes later, and then the ISM Services PMI at 3 PM.
Are you ready to act on your daily forex signals? Here’s a list of forex brokers that may be worth exploring:
