AUD/USD: Risk-off sentiment hits AUD
Yesterday’s signals were not triggered as unfortunately the bearish price action took place above the resistance level identified at 0.6382.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Idea
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6320.
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 Ideas
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6268 or 0.6208.
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 the resistance level at 0.6382 was very likely to be the day’s pivotal point as we approached the New York open. Technically I was wrong as the bearish turned happened at a slightly higher level, but I was approximately correct as we saw a fairly strong selloff from that area.
The picture now is more bearish as market sentiment on risky assets such as the AUD turns increasingly negative, fuelled by the collapse in the price of crude oil futures.
It looks likely that we will see a further fall, as I see stocks as likely to fall later which should drag the AUD down as well, while the USD is the second strongest major currency after the JPY.
We may see some support at the 0.6268 level which has been pivotal over recent days, but if it breaks down, the fall could become stronger and faster. So, I take a bearish bias today if there are two consecutive hourly closes below 0.6268.
There is nothing of high importance due today concerning either the AUD or the USD.