AUDUSD: Bearish channel threatens 0.6870
Last Thursday’s signals produced a losing long trade from the bullish bounce at the support level identified at 0.6885.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken from 8am to 5pm Tokyo time Tuesday.
Short Trade Idea
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6889.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Long Trade Idea
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6817.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Take off 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 last Thursday that if we saw two consecutive hourly closes later above 0.6930 then we should see the price continue upwards to test the next resistance level at 0.6965 and I would then take a bullish bias on this currency pair.
Identifying a pivotal point at 0.6830 was a great call as the price failed there just as the New York session got underway and has fallen consistently within a bearish price channel pattern ever since then.
The technical outlook is now more bearish, and the price is currently threatening to break below the support level at 0.6870. If it can make two consecutive hourly closes below this level after Tokyo opens for business later, it is likely to make a further meaningful move down, so I would take a bearish bias later if this scenario plays out.There is nothing of high importance due today concerning either the AUD or the USD. It is a public holiday in the USA today.