AUD/USD: RBA Meeting Minutes Seen Dovish
Yesterday’s signals were not triggered, as there was no bullish price action when the support level identified at 0.6706 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 Idea
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6706.
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.
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 consolidating triangle formation was most likely to break to the upside, with a good chance to go long if there had been a firm bullish bounce at 0.6706. I was completely wrong; it was actually the horizontal support at 0.6706 and the round number at 0.6700 which gave way quickly and cleanly. This downwards move was then boosted by a more dovish than expected RBA meeting minutes release. I was at least correct to look at that price level as pivotal.
The technical picture now is much more bearish, with the price action showing descent continuing with reasonable bearish momentum. The price looks likely that it will go on to test recent long-term low prices at 0.6672 – how it reacts there will be telling, but there I no doubt this currency pair is in a long-term bearish trend and that should be respected. Generally, I take a bearish bias on this pair, but I would want to see the price either fail to rise above 0.6700 or break below 0.6650 before getting active.
Concerning the AUD, there will be a release of Wage Price Index data at 12:30am London time. There is nothing of high importance due today regarding the USD.