Today’s AUD/USD Signals
My previous AUD/USD signal on 16th April was not triggered.
Risk 0.25%
Trades must be entered prior to 5pm Tokyo time Thursday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.7183, $0.7213, or $0.7248.
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
Go long following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of $0.7147, $0.7130, or $0.7100.
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
In my previous AUD/USD forecast last Thursday, I wrote that the bullish environment for this currency pair in macro terms was likely to continue, and the best trade set up would be a bullish bounce in the $0.7150 area.
This was a good call as the low of the day was just a couple of pips above that level, and towards the end of the New York session after retracing the price turned around and rose strongly to a new 3-year high.
Things have now cooled off as optimism over a USA / Iran deal to end the war for good cools as we are now within only a day or so before the existing ceasefire expires. Markets still expect an end to the war and a deal or ceasefire extension, but there could be a surprise the other way with a resumption of fighting. If that happens, the price will probably fall strongly.
Technically, we see the price close to completing what looks like a slightly messy but potentially valid bearish head and shoulders chart pattern. If the price breaks below the $0.7115 area it would technically complete, but that could be a trap with bulls potentially buying at $0.7100.
I think that the price is unlikely to do much until we get news about USA / Iran talks and the related ceasefire. By Thursday, we should know one way or another.
Paradoxically, today’s signal is to stay out of any new trades here – at least until we get some news. Technical factors are likely to be very secondary.
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There is nothing of high importance scheduled today concerning the AUD. Regarding the USD, there will be a release of Retail Sales data at 1:30pm and the Fed Chair Designate will be testifying before Congress at 3pm.
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