AUD/USD: AUD losing steam
Last Thursday’s signals were not triggered, as there was no bullish price action when the support levels at 0.7118 and 0.7109.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8 am New York time Monday and 5 pm Tokyo time Tuesday.
Long Trade Ideas
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7035, 0.7016, or 0.7004.
- 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 0.7139 or 0.7197.
- 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 short-term price action was indicating there would be a further move down. There was key support at 0.7118 and 0.7109 but I thought it was more likely to break down and we would probably see a pullback to at least 0.7100.
This was a good call as we did see the price make a bearish move and it went even lower than 0.7100.
The price has recovered but we have not seen the Australian Dollar go on to hit new highs in the way the Euro and precious metals have against the U.S. Dollar. So, there is definitely something a little wrong with the Australian Dollar now, and this may be due to the fact that after initial successes, the number of new coronavirus cases is rising quite strongly in Australia, leading to fears that further closure measures may need to be taken by the Australian governments on the state or even federal level.
Technically, there is a new resistance level at 0.7139 and the price is bumping against it but still being held.
A break above 0.7139 will be a weakly bullish sign. I prefer to stand aside today and wait to see how the action develops here before trading this pair.
There is nothing of high importance scheduled today concerning either the AUD or the USD.