Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered between 8am New York time and 5pm Tokyo time, over the next 24-hour period only.
Long Trades
Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.7145 or 0.7108.
Place the stop loss 1 pip below the local swing low.
Adjust 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 ride.
Short Trade
Go short following some bearish price action on the H1 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.
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 as the price had been making lows in the 0.7150 area which is a multi-year inflective low point, it may be very hard for bears to push the price significantly lower and may just possibly also be an area where we could see a long-term bullish price reversal. For this reason, I had no directional bias today.
I was wrong not to see the possibility of a strong pullback followed by a resumption of the bearish momentum, which is what we got, and another stab at the lows. However, I was right in the sense that this area around 0.7150 is a major level and still has not broken down.
I still feel that it is difficult to call what will happen next, but I would happily be bearish at any return to the resistance level at 0.7231 followed by a rejection and bearish price action. If the price goes on to get established below the support level at 0.7145, this would be a very bearish sign, as the price will be making a new multi-year low.
Regarding the AUD, there will be a release of Trade Balance data at 2:30am London time. There is nothing important due today concerning the USD.