AUD/USD Forex Signal: Is It Still Possible to Get in on the Sell-Off?

Short Trade Ideas

Consider short entries between $0.65068 and $0.65222, which were prior lows and highs for the day, aligning with mid and upper bands of the bearish price channel.

Set a stop loss at 10 pips above the entry point.

If the trade gains 25 pips, adjust the stop loss to break even.

When the price hits 25 pips, take 50% of your position as profit and manage the remaining portion accordingly.

Long Trade Ideas

Take a long entry about 10 pips below the daytime high of the last substantial bullish candle if it breaks above $0.65355.

Position the stop loss at the entry level of 10 pips.

If profits reach 25 pips, again set the stop loss to break even.

Upon reaching 25 pips in profit, close out 50% of the position for profit, managing the rest thereafter.

The clearest method to spot a typical “price action inversion” is by observing hourly candle closures, like pinbars or doji formations. Keeping an eye on price actions at these marked levels could be beneficial.

Basic Analysis of AUD/USD

Key economic factors to consider include:

The Australian manufacturing sector showed signs of reduced contraction, with the AIG index improving from -23.9 in August to -20.9. The construction sector is faring better, closing at 1.0 after July’s -1.3.

Individual PMI readings for manufacturing and services in Australia revealed unexpected results, with August figures being 555.5 and 52.0, compared to predictions of 54.9 and 51.9, respectively.

Australia’s second-quarter GDP outperformed expectations, growing by 0.6% quarterly and 1.8% year-on-year. Economists initially estimated 0.5% and 1.6% growth. Additionally, there was an upward revision of first-quarter GDP data.

In the U.S., factory orders are anticipated to drop by 1.3% in July, following a 4.8% decline the previous month.

Forex traders are also awaiting the Jolts Job Openings data for July, where a decrease to 73.8 million jobs from 7.437 million in June is expected.

So, why am I still feeling bearish on AUD/USD despite the optimistic economic signals?

Well, it seems the bearish price channel could extend further following the previous day’s breakdown. I think the rising bearish trading volume suggests additional downside risk, especially after the price dropped below the Fibonacci retracement level of 61.8%. I’m anticipating an accelerated sell-off.

For the past 24 hours, the Bullbear power indicator has mostly remained in the bearish zone, featuring several false breakouts. A descending trend line is applying further pressure on this indicator’s low points.

Volatility could pick up as bulls and bears contend for dominance at critical levels, but I’m eyeing a low test around 0.64832 later today since my last sale. Traders might aim for gains of around 25-40 pips from this short position.