AUD/USD: Medium-term strength in the AUD
Yesterday’s signals were not triggered, as the bullish price action did not take place at any of the three identified support levels which were reached yesterday.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Idea
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6579.
Place the stop loss 1 pip above the local swing high.
Adjust 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 ride.
Long Trade Ideas
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6511, 0.64739, or 0.6448.
Place the stop loss 1 pip below the local swing low.
Adjust 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 ride.
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 if the support level at 0.6511 held up, we should get a bullish turn here eventually which could provide a good long trade entry. However, if we got a couple of hourly closes below 0.6500, I expected a stronger fall to happen quickly.
This was a good call as the price broke below 0.6500 and remained below it into the New York open, which triggered another move down which made about another 60 short pips.
The price is now recovering to again approach this area around 0.6500 which is likely to be pivotal again. I would be ready to take a bearish bias if we get another failure to break above 0.6500 once New York opens. If the price instead gets established above 0.6520, that would be a bullish sign.
Note the resistance at 0.6500 has a zone about 10 or perhaps even 20 pips above it which is still likely to be resistant.
There is nothing of high importance due today concerning the AUD. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.