AUD/USD: Risk sentiment in question after FOMC release
Yesterday’s signals were not triggered, as there was no bullish price action when the price first reached 0.6976.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Thursday and 5pm Tokyo time Friday.
Long Trade Ideas
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6900 or 0.6868.
- Place the stop loss 1 pip below the local swing low.
- 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.
Short Trade Ideas
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6964.
- Place the stop loss 1 pip above the highest price made today.
- Adjust the stop loss to break even once the trade is 10 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.
AUD/USD Analysis
I wrote yesterday that the short-term price action suggested that the price was likely to make a bullish breakout above 0.7000. I would usually see this as a bullish sign but due to the FOMC release, I suggested being very cautious and quick to take profit from any long trade above 0.7000.
This was a good call, as the price did break up above 0.7000 and reached as high as 0.7060 before reversing quite strongly after the FOMC release boosted the U.S. Dollar and increased risk-off sentiment which was negative for the Australian Dollar.
The technical picture is now less bullish, and we may have seen a long-term double top above the psychologically important round number at 0.7000.
For now, the price is too evenly balanced between bulls and bears for this currency pair to be an attractive trade.
There is nothing of high importance due today concerning either the AUD or the USD.