AUD/USD: More bearish below 0.6850
Yesterday’s signals were not triggered as none of the key levels were reached yet.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm Tokyo time Wednesday.
Short Trade Idea
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6868 or 0.6889.
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 0.6817 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 if the price could make two consecutive hourly closes below 0.6870 after Tokyo opened for business later, it was likely to make a further meaningful move down, so I would take a bearish bias later if this scenario played out. It did, and the price moved lower, but is now back to that same level.
I was correct to look to the bearish side, as the price has moved lower overall in a clear swing. We can redraw the bearish price channel to better fit the highs and lows and the channel now looks more symmetrical, which is a sign of greater reliability so is another bearish sign.
All signs are bearish except the fact that the price has been reluctant to break below 0.6850. Therefore, I would only take a bearish bias today if we get two consecutive hourly closes below 0.6850 after New York opens for business OR at a bearish reversal following a retracement which touched 0.6868 as that level is so confluent with the upper trend line of the bearish price channel shown in the chart below.
There is nothing of high importance due today concerning either the AUD or the USD.