Yesterday’s signals produced a profitable short trade following the bearish reversal signalled by the near-pin candlestick rejecting the resistance level identified at 0.7231. It would probably be a good idea to exit this trade now while well in profit, as the price has run into support.
Today’s AUD/USD Signals
Risk 0.50%.
Trades may only be taken from 8am New York time to 5pm Tokyo time, during the next 24-hour period.
Long Trades
- Go long following some bullish price action on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 0.7164 or 0.7145.
- Put 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 trade is 20 pips in profit and leave the remainder of the position to run.
Short Trade
- Go short following some bearish price action on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 0.7231.
- Put 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 trade is 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 yesterday that 0.7231 looked like attractive resistance, so a short trade there could be very interesting later due to confluence with the bearish trend line shown in yesterday’s price chart. This turned out to be an excellent call, as this trade set up and has already give a nice profit. There was initially a spike up caused by the RBA Rate Statement released a few hours ago, but it was unable to convince the market which has made the Australian Dollar very weak over the long-term.
As I mentioned yesterday, the price has been making lows in the 0.7150 area which is a multi-year inflective low point. This means it may be very hard for bears to push the price significantly lower and may just possible also be an area where we could see a long-term bullish price reversal. For this reason, I have no directional bias today, and I think the good, tradable move here has probably already played out.
Regarding the AUD, the Governor of the RBA will be speaking at 10:30am London time, and there will be a release of GDP data at 2:30am. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm.