Last Tuesday’s AUD/USD signals were not triggered, as none of the key levels identified were reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be entered prior to 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 0.7760, 0.7779, or 0.7816.
- Put 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 0.7730, 0.7696, 0.7683, or 0.7673.
- Put 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 the USD was weak everywhere and risk sentiment had recovered firmly. Provided this environment persisted, the price of this currency pair was more likely to rise than fall.
I was ready to take a bullish bias if we had gotten two consecutive higher closes above 0.7825 during the day.
This was a relatively good call as the price never even reached 0.7825, and then turned bearish, so watching that level was enough to ensure staying out of trouble.
Although we have seen a recovery of riskier currencies such as the AUD against the USD in recent hours, the wider price chart hints that a symmetrical bearish price channel has begun to form, which suggests that we will see lower prices in this currency pair over the medium term.
The Australian employment data released a few hours ago seemed to have little effect on the price. Yesterday’s FOMC meeting minutes initially strengthened the dollar, but the dollar has begun selling off again over recent hours.
There is a new resistance level at 0.7779, which is very confluent with the upper trend line of the bearish price channel. A bearish reversal there after New York opens later today looks like being the best trading opportunity that might set up in this currency pair.
Concerning the USD, there will be a release of unemployment claims data at 1:30pm London time. There is nothing of high importance scheduled regarding the AUD.