AUD/USD: Possible short trade entry signal
Last Thursday’s signals were not triggered, as there was insufficiently bullish price action when the support level at 0.6841 was first reached that day.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8 am New York time Monday until 5 pm Tokyo time Tuesday.
Long Trade Ideas
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6774.
- Put the stop loss 1 pip below the lowest recent price.
- Move 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 run.
Short Trade Ideas
- Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6919.
- Put the stop loss 1 pip above the highest recent price.
- Move 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 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 Thursday that the technical picture remained bearish as long as the price channel held. I was looking for a short trade from the new resistance at 0.6920 which was confluent with the upper trend line of the bearish price channel or following two consecutive hourly closes below 0.6841.
This was a good call insofar as I was correct about 0.6841 being a pivotal level – watching this level was enough to keep out of any losing trades.
The price channel is still holding, and we may at the time of writing be seeing a bearish price turn at the upper trend line which has just been hit. If the bearish momentum increases in this area as New York opens, we may see a good short trade opportunity right away.
Much will probably depend upon how risk sentiment holds up when the NYSE opens.
There is nothing of high importance scheduled today regarding either the AUD or the USD.