Last Tuesday’s AUD/USD signals were not triggered, as there was insufficiently bullish price action when the key support level identified at 0.7732 was first reached.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken before 5pm Tokyo time Friday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7776 or 0.7816.
- Place 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 0.7715, 0.7677, 0.7649, or 0.7636.
- Place 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 bearish price channel had been invalidated, we were still seeing a pattern of lower highs and lower lows in this currency pair, reflecting AUD weakness against a strengthening U.S. dollar.
I saw the best potential opportunities as reversals at price extremes which have not yet been reached, so my call was at least enough to keep out of trouble.
The technical picture now has slowly become slightly more bullish as the price continues to slowly inch up as the key support level at 0.7715 continues to hold.
The consolidative price action here has been going on for a long time, which increases the chance that we will see a significant price movement today after U.S. inflation data is released, although there is likely to be the most price movement in the EUR/USD currency pair today.
I think the best potential opportunities which may set up today (after the U.S. data release) will be either a short trade from a bearish reversal at 0.7816 or a long trade from a bullish reversal at either 0.7715 (strong support) or 0.7677 (third shoulder for a bullish head and shoulders pattern completion).
Concerning the USD, there will be releases of U.S. CPI (inflation) and unemplyment claims data at 1:30pm London time. Regarding the AUD, there is nothing of high importance scheduled.