AUDUSD: Strongly bullish move on Chinese data / rate hold
Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 0.6822 and no bearish price action at 0.6803.
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
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6862 or 0.6885.
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
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6814 or 0.6803.
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 the bullish bounce from the support at 0.6754 had been strong and the price has again broken the (readjusted) bearish trend line, giving a somewhat more bullish technical picture. There was short-term bullish momentum, but the medium-term picture was evenly balanced and hard to predict. However, if you were holding a long trade in profit, there was no pressing reason to exit from it yet.
This was a reasonably good call as I correctly noted the more bullish situation and the strong move from the key area confluent with 0.6750. I should have been more confident in the bullish momentum although that really only became stronger later in the day. The New Zealand Dollar has moved up very strongly to exceed 0.6500 and make a new long-term high price, and the AUD has followed it, boosted partly by the RBA’s rate hold and partly by strong Chinese data.
The picture is bullish, but the price is far from support and near resistance, so it may be best to wait for a pullback before looking for a long trade now. Also, there will be a release of Australian GDP data later today which could have a strong impact upon the price in either direction.
The best I can say for today is that a short trade carefully monitored from a bearish rejection of 0.6885, with risk taken off before the GDP release, would probably be the best opportunity that could set up here today.
Concerning the AUD, there will be a release of GDP data at 12:30am London time. There is nothing of high importance scheduled regarding the USD.