AUD/USD: Bulls have a small edge
Yesterday’s signals were not triggered as the bearish reversal at 0.7255 did not complete until after 5pm Tokyo time.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8 am New York time Thursday and 5 pm Tokyo time Friday.
Long Trade Ideas
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7217 or 0.7187.
- 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
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.7255 or 0.7331.
- 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 yesterday that bulls were beginning to get the upper hand, so I was ready to take a bullish bias today if we got two consecutive hourly closes above 0.7217, up to 0.7255 only.
This was a perfect, profitable call as it accurately forecasts exactly what happened.
The technical situation is a little more bullish now that the former resistance at 0.7217 has been cleared, but the price now faces another resistant obstacle – the resistance at 0.7255 which the price has now arrived at.
Early signs show that this level at 0.7255 is going to be broken, which would be a bullish sign and suggest that the price will be likely to move up to reach the next resistance level at 0.7331.
However, it might be that the price fails here, as it is confluent with a major psychological level and was recently an area of bearish infection.
There may be a leak or news from the Jackson Hole summit later today which pushes the price of the U.S. Dollar around, although that is not a very likely scenario.
I am prepared to use 0.7255 as a pivotal point today and either take a bullish bias if we get two consecutive hourly closes after the New York open above that level or a bearish bias if the level holds until that time then produces a bearish price action rejection.
There is nothing of high importance due today regarding the AUD. Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech at 2:10 pm London time, as the Jackson Hole Symposium gets underway.