AUD/USD: Price breaks above pivotal 0.7250 area
Yesterday’s Signals were not triggered as the bearish price action took place just above the resistance level identified at 0.7254.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8 am New York time Wednesday to 5 pm Tokyo time Thursday.
Long Trade Ideas
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.7261 or 0.7197.
- 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
- Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.7331.
- 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 was likely to rise to the 0.7250 which was psychologically important and likely to be resistant due to its confluence with a natural horizontal resistance level at 0.7254. However, I was prepared to take a long trade from a second consecutive hourly close above 0.7254.
These were good calls as the price did continue rising to reach 0.7254, but also failed to break above that level with two hourly closes until just an hour or two ago, so I was correct at seeing this level as pivotal and likely to be resistant.
The outlook has now become more bullish above 0.7254, so we are likely to see a further rise today, but I think bulls should be a little concerned about the small, indecisive candlesticks that are being printed as we approach the New York session. We need to see stronger momentum coming in as New York opens in order to be confident of a further rise.
I will take a long trade after the New York open if we get a retracement to 0.7261 and a firm bullish bounce there.
There is nothing of high importance due today concerning either the USD or the AUD.