AUDUSD: Price falls to new 10-year low at 0.6677
Yesterday’s signals were not triggered, as there was no bullish price action when 0.6745 was reached.
Today’s AUD/USD Signals
Trades may only be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6745 or 0.6829.
Put 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.
I wrote yesterday that the Australian Dollar remained one of the weaker currencies over the long-term, despite its recovery over recent hours. I still saw the big opportunity to watch for here as a sustained break to multi-year lows below 0.6745. If the price fell again to that area and makes a bullish reversal, a long-term buy could be a great trade – the 0.6750 is a very important pivotal point to watch.
This was a good call, as the combination of the surprise rate cut by the RBNZ to 1.00% and the Chinese devaluation of the Yuan sent the AUD down sharply to a new 10-year low over two hours. The price has been recovering quite firmly from there and will face its first test probably at the 0.6745 / 0.6750 area which we can now expect to be potential resistance.
I would take a bearish bias later if we get a firm bearish reversal at 0.6745 / 0.6750. It will be idea if the price touches 0.6750 as well as 0.6745. This area looks extremely likely to be today’s pivotal point.There is nothing of high importance due today concerning either the AUD or the USD.