Last Tuesday’s AUD/USD signals were not triggered, as the price never quite reached the support level at 0.7575 and made no bearish price action when either of the resistance levels identified were first reached.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken prior to 5pm Tokyo time Wednesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7854 or 0.7950.
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 0.7754 or 0.7705.
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 Tuesday that although the U.S. Dollar was mixed, the AUD was weak and looking more and more likely to make a decisive bearish breakdown. I was ready to go short after two consecutive hourly closes below 0.7485.
I was correct to wait for such a decisive break below 0.7500 as it never happened, avoiding the problem of a short trade entry just before the price started to rise decisively.
The technical picture has changed a lot over the past week, becoming much more bullish as the U.S. dollar begins to sell off firmly while several major currencies, including the Aussie, are relatively strong. This has pushed the price up.
Although there are no key resistance levels before 0.7854 which is some way away, I see the technical feature to watch out for today as whether the price can get firmly established above 0.7800. If so, and if the greenback maintains its weakness, we will be likely to see the price continue to rise today to hit 0.7850.
If there is a bearish retracement, a long trade from a bullish bounce at 0.7752 could be a great buy, as this support is confluent with the big psychological quarter-number at 0.7750.
Regarding the AUD, there will be a release of Retail Sales data at 2:30am London time. There is nothing of high importance due today concerning the USD.