AUD/USD: Very Bearish
Yesterday’s signals could have produced a losing long trade from the minor bullish bounce at 0.6754 although I was clear about not wanting to take any long trades.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered from 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Ideas
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6748, 0.6765, or 0.6781.
- 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 Idea
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6677
- 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 picture had become very bearish as the AUD as a currency gets hit very hard in such a risk-off environment as we had, especially when it came from a problem in China (the coronavirus) to which the Australian economy is heavily exposed.
I discounted possible bullish bounces from nearby support levels, favouring instead short trades from retracements to any resistance levels as the best possible strategy here.
This was a good call as the price has continued to move down to make new lows.
The technical picture is even more bearish now as the price gets established below the key psychological level at 0.6750. There is no key support until 0.6677 so the price has room to fall and the line of least resistance is very clearly downwards.
I take a bearish bias today below 0.6750.
Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm. Regarding the AUD, there will be a release of CPI (inflation) data at 12:30am London time.