AUD/USD: Risk sentiment boosting AUD
Yesterday’s signals were not triggered, as the bearish price action took place slightly above 0.6919.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8 am New York time Tuesday and 5 pm Tokyo time Wednesday.
Long Trade Ideas
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6892.
- Place the stop loss 1 pip below the lowest recent price.
- Adjust 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 ride.
Short Trade Ideas
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.7109.
- Place the stop loss 1 pip above the highest recent price.
- Adjust 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 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 price channel was still holding, but we were coming to a pivotal moment as the upper channel trend line was being hit. I thought that whether we would get a breakout or bearish reversal would probably depend upon how risk sentiment held up when the NYSE opened.
This was a good call as the stock market went up and we saw a bullish breakout here. However, the bullish movement is somewhat muted and not very strong.
There is no doubt we have a more bullish technical picture here now as we have both a breakout from the bearish channel and also an invalidation of the former resistance level identified at 0.6919 – there is now almost nothing before 0.7109 to stop a further rise, so the line of least resistance is certainly upwards. Despite that, there are recent bearish inflection points at about 0.6950 and 0.6975, not to mention the big round number at 0.7000.
I will wait for the price to get established above 0.7000 before taking a bullish bias.
There is nothing of high importance scheduled today regarding either the AUD or the USD.