My signal yesterday was not triggered as there was no bullish price action when the support level identified at $0.6836 was first reached.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken prior to 5 pm Tokyo time Wednesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6836, $0.6870 or $0.6895.
- Put 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.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $0.6757 or $0.6731.
- Put stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 20 pips in prof
- Take off 50% of the position as profit when the price reaches 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 in my previous forecast that the AUD/USD currency pair yesterday made a firm bullish bounce at the key support level at $0.6836. This made it look likely that the day would be an up day, but it may be too late now here to find a good entry point for a new long trade.
I was wrong about the higher daily close, but the price did not fall until the Asian session got underway.
The picture now is more bearish after the price began to fall hard, with the Aussie the weakest major currency during today’s Asian session. The weakness was initially generated by worries over Chinese monetary stimulus, which is seen as disappointing, and as well as hitting the Chinese stock market, this hit the highly China-exposed Aussie too. Later in the session, the Reserve Bank of Australia released the minutes of its most recent policy meeting which showed the Bank is very evenly split between a rate pause and a rate hike as the next course of action, which seems to have driven the Aussie lower still.
The US Dollar is generally strong today.
These factors all combine to push the price lower and to make the outlook look bearish, but technical factors put this in some doubt as the price approaches the area near $0.6757 which has been firmly supportive for a while, as can be seen by the recent long lower wicks there in the price chart below.
I am not sure the price will be likely to fall much further.
If the resistance level at $0.6836 is hit first, I will be prepared to take a short trade there from a firm bearish rejection.
If the price strongly rejects $0.6757 and the big quarter-number at $0.6750, a long scalp becomes a possibility.
There is nothing of high importance scheduled today regarding either the AUD or the USD.
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