AUD/USD: New long-term highs hit again
Yesterday’s signals were not triggered, as the bearish price action took place above 0.7391.
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 0.7372 or 0.7292.
- 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 0.7395 or 0.7419.
- 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 as we were seeing risk assets such as stocks and the Australian Dollar strongly bullish against the U.S. Dollar, I was looking for a long trade here.
I wanted to take a long trade from a bounce at the nearest support level of 0.7292 if the price got there. I was nervous to take a bullish bias from any breakout to new 1-year high prices due to the nearby resistance levels.
I think this turned out to be quite a good call as although the price did make new high prices after the New York open, the price is only slightly higher than it was 24 hours ago. More importantly, we have the price action re-printing a resistance level at 0.7395 and if this level is not broken soon, the price is quite likely to make a deeper bearish retracement.
The key level to watch is probably going to be the support at 0.7372 but this is likely to extend down to about 0.7359. In short, if the price falls to below 0.7350 it is probably going to fall by another 50 pips or so.
The long-term bullish trend is strong and likely to remain in force, so the best trades will probably be buys from bounces at support levels. Yet I see a retracement to the support at 0.7292 as quite likely to happen so I would wait before buying this currency pair unless we get two consecutive hourly closes above 0.7419 which would be a very bullish sign that the price was likely to rise to the big round number at 0.7500.
Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time. There is nothing of high importance due today regarding the AUD.