Last Tuesday’s AUD/USD signals were not triggered, as there was no suitable price action at either of the key levels which were reached that day.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be taken before 5pm Tokyo time Friday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7409, 0.7424, or 0.7450.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7356.
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 we had a weakly ascending structure supported by a trend line, with only a weakly bullish tilt, and the price was still unable to break above the proven pivotal level at 0.7403. I thought that if the price failed at 0.7403 it would suggest the bearish trend would be resuming instead.
This was not an effective call as the price did get established above 0.7403 but then fell. However, we can now draw a nearly symmetrical upper trend line to produce a wide bullish price channel. The price is ascending weakly but with deep retracements, which can make this impossible to trade as a breakout. Buying the dips is probably going to work better as a strategy.
The obvious long trade entry setup I can see coming in the chart below would be a bullish bounce at the confluence which will arrive within a few hours between the ascending trend line and the horizontal support level at 0.7356. If we get a bullish bounce rejecting both, and ideally also rejecting the half-number at 0.7350, this could be a high probability long trade entry.
The AUD may also be boosted by the strength we are seeing in the New Zealand dollar, as these two currencies are positively correlated.
Regarding the AUD, the Governor of the RBA will be testifying before Parliament at 2am London time. There is nothing of high importance scheduled today concerning the USD.