AUD/USD: USD strong as RBA leaves rates unchanged
Yesterday’s signals were not triggered as none of the key levels identified were reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken from 8 am New York time Tuesday to 5 pm Tokyo time Wednesday.
Long Trade Ideas
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6885.
- Place the stop loss 1 pip below the lowest recent price.
- Adjust 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 ride.
Short Trade Ideas
- Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6951 or 0.6970.
- Place the stop loss 1 pip above the highest recent price.
- Adjust 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 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 the problem here for bulls was that although conditions were generally bullish, the price was finding it hard to get established above the recent bearish inflection points not far below the key psychological round number at 0.7000.
Therefore, I was looking to get bullish only after we had two consecutive hourly closes above 0.7000.
This was a good call as the price turned bearish before it even touched the big round number at 0.7000. The technical picture is now much more bearish as we have two new lower resistance levels. The level at 0.6951 looks especially strong and it is confluent with the half number at 0.6950 also.
Risk appetite may improve and drive the price up later, but we are seeing a stronger U.S. Dollar today so far.
I am willing to take a short trade if we get a firm bearish reversal following a retracement to the resistance level at 0.6951.
There is nothing of high importance scheduled today regarding either the AUD or the USD.