- Risk 0.25%
- Trades may only be taken before 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 $0.7026, $0,6959, or $0.6901.
- 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
- Long entry following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of $0.7091, $0.7213, or $0.7248.
- 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
In my previous AUD/USD forecast last Wednesday, I wrote that we were likely to see a long trade opportunity, either from a bounce at any of the support levels which I had identified or after a bullish breakout above $0.7030.
The breakout call was a good and profitable call, as the price reached as high as $0.7095 later that day.
The picture has become more bullish since this morning’s rate hike by the RBA. Although markets priced in a 73% chance of this happened and therefore expected it, it was still a small hawkish tilt, as it happened and with a unanimous decision. This has pushed the price higher. However, we see the half number at $0.7050 acting as minor support.
The Aussie is also getting a minor tailwind from improving risk sentiment today, although the US Dollar remains relatively firm.
I think we might see a further rise later today, or possible just a minor decline followed by a consolidation. I think a rise is a bit more likely.
It will depend upon how sentiment goes after the New York open when the US Dollar starts to get traded in much higher volume.
The JOLTS Job Openings data may also play a role in that.
A long trade from $0.7026 or $0.6959 might work out well.
There is nothing of high importance scheduled today concerning the AUD. Regarding the USD, there will be a release of JOLTS Job Openings data at about 3pm London time today.
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