AUD/USD: Bulls and bears are evenly matched
Yesterday’s signals were not triggered, as the price did not reach the resistance level identified at 0.6473 until after 5pm Tokyo time.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade Idea
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6473.
Put 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
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6327.
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 I would take a bearish bias if we had gotten two consecutive hourly closes below the round number at 0.6400. We did, but unfortunately the price turned bullish quickly and came all the way back to the resistance level at 0.6473.
It looks as if the price is consolidating between about 0.6473 and 0.6390 in wide swings, with bulls and bears quite evenly matched. It looks like we are getting something close to a double top and a double bottom at the same time. Strangely, even when the USD is strong, the AUD is also quite strong, so there is not a lot of price movement lately.
The best I can say about today is that the resistance level at 0.6473 seems strong, so I would be prepared to take a short trade if we get another bearish rejection of that level later. The US data later probably will not have a big impact on the price, but the RBA’s statement during the Asian session might.
Concerning the USD, there will be a release of Unemployment Claims data at 1:30pm London time. Regarding the AUD, the RBA will be releasing its Monetary Policy Statement at 2:30am.