AUD/USD: Bulls and bears look evenly balanced
Last Thursday’s signals produced a profitable short trade from the bearish reversal at the resistance level I had identified at 0.7317.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered from 8 am New York time Monday until 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 0.7248, 0.7229, 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 0.7317 or 0.7340.
- 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 as I saw the round number at 0.7300 as the day’s likely pivotal point, I was ready to take a long trade if we had gotten two consecutive hourly closes above 0.7300, targeting 0.7340.
This was a useful call as the price broke above that level but reversed immediately over the next hour, so waiting for the two consecutive closes above 0.7300 was a good way to avoid taking a losing short trade.
The picture here shown movement and swings, but in fact, the price is currently in a very flat and evenly matched consolidation pattern between 0.7248 and 0.7317. Neither buyers nor sellers seem to have an advantage and it is impossible to say in which direction the next major movement will come.
Due to the strong consolidation pattern, I am equally ready to take a short trade from a bearish rejection at 0.7317 or a bullish bounce at 0.7248.
The Reserve Bank of Australia will be releasing minutes of its recent policy meeting later and this may be the spark for the breakout, so beware of holding open trades at that time and try to take risks off before it happens.
There is nothing of high importance due today regarding the USD. Concerning the AUD, the Reserve Bank of Australia will be releasing their Monetary Policy Meeting Minutes at 2:30 am London time.