My last signal on 30th March produced a nicely profitable short trade from the bearish pin bar/inside bar combo rejection of the resistance level which I had identified at $0.6726.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be entered before 5pm Tokyo time Wednesday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6786 or $0.6847.
- 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.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6748, $0.6726, $0.6709, or $0.6679.
- 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.
- Remove 50% of the position as profit when the price reaches 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 in my previous forecast that the AUD/USD currency pair was beginning to show a bullish breakout from the dominant consolidating triangle pattern. I was looking for a long trade at the support level identified at $0.6694, which did set up, so this was a good call. However, the short trade from $0.6726 was the better opportunity later during the Asian session.
The technical picture was bullish, with a strong upwards move following the aforementioned bullish breakout from the formerly dominant consolidating triangle pattern. However, after reaching the resistance level at $0.6786 the price clearly topped out and has been making a bearish retracement with similar momentum as the initial rise.
At the time of writing, the price was threatening to break below the support level at $0.6748.
There are two bearish developments here: firstly, the US Dollar is strengthening against its long-term trend, and the Australian Dollar is a bit weak after the Reserve Bank of Australia at its monthly policy meeting earlier today passed on an expected 0.25% rate hike.
It is not clear how much further the downwards price movement will go, but the support level at $0.6726 looks likely to be strong as it produced a notable bearish inflection when tested from the other side a few days ago.
I will be happy to enter a new long trade if we get a bullish bounce at $0.6726 today.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of JOLTS Job Openings data at 3pm London time.
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