AUD/USD: Upwards move could continue to 0.7182
Last Thursday’s signals were not triggered as the price action when 0.7035 was first reached was not sufficiently bullish to produce a long trade entry signal.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken from 8 am New York time Tuesday to 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 0.7075, 0.7041, 0.7004, or 0.6963.
- 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 0.7117, 0.7139, or 0.7182.
- 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 taking a long trade here (close to 0.7035) was brave but may have long-term potential and suit a high reward to risk target trading profile. We may see a medium or long-term bullish trend change, as the price was so close to the very psychologically significant round number at 0.7000, and there was a cluster of support levels just above 0.7000 starting at 0.7035.
This was an OK call as we have seen a bullish turn in the price not far from the big round number at 0.7000 and this bullish movement may have the momentum to continue. We might even see this bottom near 0.7000 to become a long-term bottom.
At present we are seeing firm short-term bullish momentum, with the Australian Dollar acting as one of the strongest major currencies over recent hours. Although the price is close to two resistance levels shown in the price chart below, I do not think they look likely to hold. I see the next strong resistance level as likely to be at 0.7182 so I am prepared to buy dips and turns on short-term time frames in the bullish direction if this momentum continues after today’s New York open.
There is nothing of high importance due today regarding either the AUD or the USD.