AUD/USD: Support 0.6250/68 looks pivotal
Last Tuesday’s signals were not triggered, as there was no bullish price action when the support level identified at 0.6373 was hit later that day.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8am New York time Thursday to 5pm Tokyo time Friday.
Short Trade Idea
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6373.
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 last Tuesday that I expected a bearish retracement now to about 0.6373 before we got a bullish bounce and a likely resumption of the dominant bullish trend which we see in this pair.
I was correct about the pullback to 0.6373 but it continued to fall further and broke through that level very easily.
This has produced a more bearish technical picture, and the price looks likely to soon reach the next support level at 0.6268 which is confluent with a major quarter-number at 0.6250. This area is likely to be very pivotal now – it is likely to either provide enough support to resume the old medium-term bullish trend, or to break down strongly and give an even more bearish picture.
I would take a long trade from a strong bullish rejection of 0.6268 as long as the price also touches 0.6250 as part of the price action.
There is nothing of high importance due today concerning the AUD. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.