Last Thursday’s AUD/USD signals were not triggered, as none of the key support or resistance levels I had identified were reached that day.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered prior to 5pm Tokyo time Wednesday.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7851.
Put the stop loss 1 pip above the local swing high.
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 price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7768, 0.7754, or 0.7713.
Put the stop loss 1 pip below the local swing low.
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 price reaches 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 bulls still had an edge, but if 0.7750 continued to hold there would be a bearish reversal soon. I saw potential in a bearish reversal off 0.7750 or a bullish bounce at the support a few pips above 0.7700.
This was an indifferent call, but enough to keep out of trouble. Over the medium-term it was correct, as the price has continued to rise higher without ever breaking below the support level at 0.7713.
The technical picture has become more bullish during recent days as we have seen the price get well established above the pivotal area around 0.7750. Markets are seeing risk-on sentiment, which boosts the AUD more than almost any other major currency, and a continuation of weakness in the U.S. dollar. This combination makes the AUD/USD very attractive to trade now in a long direction.
The odds favour bulls here, so I will be happy to take a new long trade if we get a bullish bounce from a retracement to either of the support levels which I have identified at 0.7768 or 0.7754.
There is nothing of high impoportance due today regarding either the AUD or the USD.