Last Tuesday’s AUD/USD signals produced a long trade from the bullish doji candlestick which rejected the support level at 0.7697, but it only made the minimum 20 pips profit so was eventually stopped out for a breakeven trade.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken before 5pm Tokyo time Friday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7811, 0.7839, or 0.7884.
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 Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7711 or 0.7669.
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 Tuesday that we were seeing initial signs of a bullish double-bottom formation getting printed from the area of support which began below the current price at 0.7624.
I thought that a sustained break above 0.7750 would likely be a bullish sign and suggest a continued rise to 0.7811 if it set up.
This was a good call as although I was correct about Tuesday being an up day, I was even more correct that the upside would be limited unless the price could break up above 0.7750.
This bullish breakout finally happened as we have seen a strong recovery in “risk” assets over recent hours, which of course includes the Aussie.
This bullish movement is strong and firm and the price looks likely to reach at least as high as 0.7811, so I take a cautious bullish bias right away at the time of writing.
If the price reaches the second higher resistance level at 0.7839, that is likely to be strong and may well cap the day’s advance, so it might be a wise profit target for any long trade taken here.
Concerning the USD, there will be a 30-year bond auction at 6:01pm London time.