Last Thursday’s AUD/USD signals were not triggered, as neither of the key levels given that day have been reached yet.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7729 or 0.7774.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7702 or 0.7642.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 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 last Thursday that a narrowing consolidating triangle pattern had become dominant, so traders should not take a bullish bias until the price got established above the upper trend line, which was at about 0.7760.
The price did break above that level and out of the consolidating triangle, but fell back quite soon, so in a sense this was not a great call. However, I have been right about the price continuing to consolidate above 0.7642 without really going anywhere, as can be seen in the price chart below.
The former triangle trend lines have been redrawn to the point where there is barely a triangle – what we see below is a wide, flat consolidation above the very pivotal support level at 0.7642. This pattern plus a relative congestion of support and resistance levels nearby means that this may not be a great currency pair to be trading right now, although it is in focus as a key barometer of market risk sentiment.
I am prepared to take cautious long trades from bounces at either of the nearby support levels or a short trade from a bearish reversal at 0.7774, but in this environment, any trade should be monitored carefully on a short time frame due to the congested price action which means sustained directional movement is relatively unlikely.
There is nothing of high importance scheduled today regarding either the AUD or the USD.