AUDUSD: Deeper bearish retracement
Yesterday’s signals produced a profitable short trade from the bearish reversal which rejected the resistance level I had identified at 0.7053
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Long Trade Idea
Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.6993.
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 Ideas
Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.7035, 0.7053, or 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 we had a bearish pull back, but the bullish trend remained intact. This meant long trades from bounces at support levels such as 0.7025 or 0.6993 were likely to be the best opportunities. However, the price cut through these levels and there is now no support until 0.6993. This leaves a more bearish picture as the U.S. Dollar strengthens. A break above 0.7035 would give the bulls some hope, and a break above 0.7053 would be even more bullish. However, if we get a firm bearish failure to break above 0.7035 as the New York session gets underway, as this looks likely to be today’s pivotal point, I would take a cautious bearish bias and expect the price to move down towards the 0.7000 area.
There is nothing of high importance due today regarding either the USD or the AUD.