AUD/USD Forecast Today: Consolidation Pattern

China’s zero-covid policy to stem the spread of the coronavirus has slightly weakened the Australian dollar.

My previous recommendation on October 12th produced a profitable buy bit of a bullish hammer candle that rejected the support I had set at $0.6250.

Today’s recommendations for trading the AUD/USD currency pair

  • risk 0.75%
  • Trades must be made before 5pm Tokyo time on Tuesday.

Selling trading idea

  • Take a sell trade after the price action reverses to the downside on the H1 time frame right on the next touch of $0.6520.
  • Set your stop loss 1 pip above the local swing high.
  • Move the stop loss order to break even once the trade has made a profit of 20 pips.
  • Take 50% of the position as profit when the price makes a profit of 20 pips and let the rest of the position work.

Buy trading ideas

  • Take a long trade right after the price action reverses to the upside on the H1 timeframe on the next touch of $0.6404, $0.6368, $0.6350 or $0.6324.
  • Set your stop loss 1 pip below the local swing low.
  • Move the stop loss order to break even once the trade has made a profit of 20 pips.
  • Take 50% of the position as profit when the price makes a profit of 20 pips and let the rest of the position work.

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 a sunken candle with a higher close. You can exploit these levels or areas by monitoring the price action that occurs at the specified levels.

AUD/USD trading analysis

I wrote in my previous forecast that the AUDUSD was showing a technical picture to the downside, despite the short-term rally from $0.6250. I was looking for a short trade from the $0.6342 resistance level, which was not reached that day.

I was right on the long term, but not over the day, as today’s best opportunity was another buy trade of rejection to the upside at $0.6250, which was good for a profit of about 35 pips.

The technical situation is choppy, with the upper end of the dominant range just above $0.6500. Despite this, the line of least resistance appears to be on the upside, with four tight support levels close to about 100 pips from the current price.

This indicates that if we get a meaningful opportunity today in this currency pair, it is likely to be a long trade from the bounce off one of these support levels. All these nearby levels look strong and are likely to hold. The announcement of the policy to stop the spread of the Corona virus by China drove the price down, but I don’t see this as too negative news as it would send the price lower, breaking several support levels.

The best approach is likely to be to look for a quick buy trade to take advantage of minor price movements away from any such bounce off support, and then watch very carefully and carefully on short time frames, as there is not likely to be much profit in that, So you better be prepared for that smart way out.


The chart was generated by . platform TradingView

There is nothing significant due today regarding the Australian dollar or the US dollar.

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