AUDUSD: Bearish momentum breaks down 0.6905
Yesterday’s signals were not triggered, as there was no bullish price action when the price reached 0.6903.
Today’s AUD/USD Signals
Risk 0.50%.
Trades may only be entered between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Long Trade Ideas
Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.6857 or 0.6827.
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 Idea
Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.6917.
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 price had been held up by the support at 0.6903 for several hours, so it seemed obvious this would be the day’s pivotal point. If the price broke firmly below that level and closed below it for two consecutive hours on healthy volatility, I was ready to take a bearish bias on this currency pair. The two closes happened later on during the New York session, but volatility was low so probably most traders would not have made a short entry, although it would have been successful for a few short pips so far.
The price is continuing to fall slowly and is making new short and medium-term low prices. I cannot see any reason not to take a bearish bias on this currency pair until the price begins to make a bullish reversal close to or at the support level at 0.6857 which is likely to be firm, at least when it is first reached, as it marks a major bullish inflection point over the medium-term.
Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time. Regarding the AUD, there will be a release of CPI (inflation) data at 2:30am.