AUDUSD: Stronger inflation data gives AUD a boost
Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s AUD/USD Signals
Risk 0.50%.
Trades must be taken from 8am New York time Wednesday and 5pm Tokyo time Thursday.
Long Trade Idea
Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.6857.
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 Idea
Short entry following some bearish price action on the H1 time frame immediately upon the next touch of 0.6917.
Place the stop loss 1 pip above the local swing high.
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.
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 was continuing to fall slowly and was making new short and medium-term low prices. I could not see any reason not to take a bearish bias on this currency pair until the price began to make a bullish reversal close to or at the support level at 0.6857 which was likely to be firm.
This was a good call as the price continued to fall over the day as I expected, before making a low during the Asian session only about 5 or 6 pips above the support level at 0.6857 which I thought would survive – the scenario I outlined to watch out for was very accurate.
The Australian Dollar, which had fallen heavily over the past several days, got a boost a few hours ago as Australian inflation data was announced which was a little stronger than had been expected. This made the rate outlook slightly more hawkish which pushed up the price by about 30 pips.
It is hard to say what is most likely to happen next. Focus will now shift away from the AUD and towards the USD as there are some major data releases concerning that currency which can move in the price in either direction, in an unpredictable way.
I take no directional bias on this currency pair today.
There is nothing of high importance due today concerning the AUD. Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15pm London time, followed by the FOMC Statement and Federal Funds Rate at 7pm and the FOMC Press Conference half an hour after that.