AUD/USD: Breakdown towards 0.6500 looks likely
Last Thursday’s signals were not triggered as the price never reached the resistance level identified at 0.6662.
Today’s AUD/USD Signals
Trades must be entered from 8am New York time Monday to 5pm Tokyo time Tuesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6635 or 0.6662.
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.
I wrote yesterday that I would take a bearish bias following a bullish retracement and failure to break above 0.6662, or if there were two consecutive hourly closes later below the lower trend line shown in the price chart. There were two closes below that trend line and afterwards the price continued to fall by another 20 pips approximately over the rest of the day, so this was a good call.
The technical picture remains very bearish, with the price opening at a new 11-year low and price action continuing to look bearish with the price in a symmetrical bearish channel. The Australian Dollar is always sensitive to risk aversion and also to Asian economic problems, and the coronavirus is today causing both. Meanwhile, the Dollar is broadly strong, although the Japanese Yen is even stronger.
I take a bearish bias on this currency pair today. If there are key countries where news emerges of significantly widening outbreaks, we can expect sharp downwards movement later.There is nothing of high importance due today concerning either the USD or the AUD.