AUDUSD: More bearish below 0.6850
Yesterday’s signals were not triggered, as there was no bullish price action at 0.6850 when it was reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6850 or 0.6917.
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.
Long Trade Ideas
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6830 or 0.6800.
Put 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.
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 I preferred to look for long trades here, either following a bullish breakout above 0.6890 after the RBA release, or from a bullish bounce off 0.6850 at any time. This was good enough to stay out of trouble as the price went down and broke cleanly through the support level I had identified at 0.6850.
The break below 0.6850 is technically significant and we have a more bearish picture now. This is reinforced by the RBA’s rate statement which was released earlier which mooted a further rate cut, which causes a more dovish sentiment on the AUD. If the key support at 0.6830 breaks down as well, I think the price will fall further quite quickly, so there could be a short trade opportunity on a bearish breakout there. Alternatively, a retest of 0.6850 with a bearish rejection of the level could also be an excellent short trade. I would take a bearish bias on this currency pair if either set-up plays out later.
There is nothing of high importance due today regarding either the AUD or the USD.