AUD/USD: Consolidating above 0.6706
Last Thursday’s signals produced a short trade from the bearish rejection of the resistance level identified at 0.6735. This trade is in a small amount of floating profit and it would probably be wise to close it out now.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm Tokyo time Tuesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6781 or 0.6799.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Long Trade Idea
Go long following bearish price action on the H1 time frame immediately upon the next touch of 0.6706.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
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 bulls and bears were very evenly matched within a relatively tight price range, so apart from the chance for a quick scalp from a bounce off a key level, I wanted to avoid trading this currency pair yesterday. This would have meant missing a very minorly profitable short trade but was probably wise as the price has continued to consolidate over the past 24 hours.
The technical picture now shows a narrowing triangle with a descending trend line as the upper border, and the horizontal support level at 0.6706 as the flat lower border. This suggests bullishness, as it seems more likely to break to the upside. It could be possible to trade a bullish breakout from this triangle later, but probably a long trade from a firm bullish bounce rejecting 0.6706 as its next touch and ideally also rejecting 0.6700 as a round number would be an even better long trade. I will take a bullish bias if we get such a bounce later in the first few hours after Tokyo opens for business.
Concerning the AUD, there will be a release of the RBA’s Monetary Policy Meeting Minutes at 12:30am London time. There is nothing of high importance due today regarding the USD. It is a public holiday today in the U.S.A.