Yesterday’s signals produced a losing long trade from the bullish inside candlestick on the hourly chart which rejected the support level identified at 0.7088 but turned into a loser after the Australian CPI data was released.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Long Trades
- Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.7027 or 0.6986.
- 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.
- Take off 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
- Short entry following some bearish price action on the H1 time frame immediately upon the next touch of 0.7088.
- 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 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 the Australian inflation data due later during the Asian session was likely to be the prime driver, and this is uncertain so it might be wise to step aside unless the price got active during the New York session and breaks a key level or strongly bounces off one. We did get a bounce at support during the New York session and this worked until the Australian CPI data came out and produced a surprising result – there is currently zero inflation in Australia, making a weakening of monetary policy more likely and sending the price sharply down. Despite that bearish outcome, there is support above the psychologically important 0.7000 area which has held before and may well hold again until the RBA makes a definite policy change. I think the price is likely to consolidate above 0.7027 today.
There is nothing of high importance due today concerning either the AUD or the USD.