My previous signal last Thursday was not triggered as there was insufficiently bearish price action when the resistance level which I identified at $0.6895 was reached, although it did hold and accurately marked the high of the day.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades must be taken before 5pm Tokyo time Tuesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6851, $0.6877, 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 $0.6794 or $0.6744.
- Put stop loss 1 pip below the local swing low.
- 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.
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 simply bullish following the previous day’s lower than expected US CPI (inflation) data, which triggered a solid bullish breakout beyond $0.6700 and $06800 as well.
I was only interested in long trades and was looking for a bullish bounce off $0.6794.
This was a good call insofar as it was very much an up day, with the price rising firmly boosted by the strong risk-on sentiment and selloff in the US Dollar, getting all the way to the key resistance level at $0.6895 before eventually reversing.
The price has come down over recent hours as risk sentiment has soured slightly during today’s Asian session, but the price is doing nothing special, is in a comfortable area, and has no real momentum. As it is likely to be a quiet Monday, this makes today’s price movement here difficult to predict.
There may be an opportunity for a scalp off the support level at $0.6794 if it is reached today but it will be wise to be conservative with taking profits from that if it sets up.
Concerning the USD, there will be a release today US Empire State Manufacturing Index data at 1:30pm London time. Regarding the AUD, the Reserve Bank of Australia will release the minutes of its most recent policy meeting at 2:30am.
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