AUD/USD: Long-term bullish trend
Yesterday’s signals produced a profitable short trade from the bearish reversal which rejected the resistance level identified at 0.7340.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8 am New York time Thursday and 5 pm Tokyo time Friday.
Long Trade Ideas
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.7281 or 0.7248.
- 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 0.7310, 0.7340, or 0.7363.
- 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 recent rise in price was being suppressed by quite strong resistance at 0.7340 and this could be a major pivotal point if it held until the FOMC release.
This was a great call as it did hold and provided a profitable short trade from the bearish reversal there, although I was looking for a bullish breakout and a long trade.
The price has continued to swing up and down and now seems clear from looking at the below price chart that the best way to describe the technical picture is as a relatively wide consolidation above the strong support confluent with the psychological quarter-number at 0.7250. The resistance overhead at 0.7340 is also strong.
It is likely that the price will continue to consolidate between 0.7250 and 0.7340 over the rest of this week at least. Neither the poorer than expected FOMC release nor the better than expected Australian unemployment data were sufficient to generate any truly significant price movement in this currency pair.
There is nothing of high importance regarding either the USD or the AUD.