Last Tuesday’s AUD/USD signals were not triggered, as there was no bullish price action when the support level identified at 0.7614 was first reached.
Today’s AUD/USD Signals
Risk 0.75%.0.7668
Trades must be entered prior to 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 0.7585 or 0.7623.
Put 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 0.7498 or 0.7485.
Put 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 the technical picture was still one of consolidation, with a key range between 0.7668 and 0.7614.
I thought that if the price again pulled back to the area at or very close to 0.7668 then made a firm bearish reversal, this could be a good short trade set up.
This was a relatively good call as although the resistance level at 0.7668 was not reached, I was correct about looking to the short side.
The technical picture now is one of short-term consolidation without any bearish momentum but with plenty of room remaining for the price to fall to the very psychologically important round number at 0.7500.
The Aussie has shown a great deal of relative weakness over recent days, rivalling the currencies showing longer-term weakness such as the euro and the Australian dollar. There is no doub,t however, that the Forex market is being primarily driven by strength in the U.S. dollar.
I am prepared to take a short trade from a bearish reversal which might set up later at 0.7585 in line with the long-term trend. I am also prepared to take a long trade from a bullish bounce at 0.7500 as it is such a key level, but I would monitor any long trade carefully on a short-term time frame.
There is nothing of high importance due today regarding the AUD as it is a public holiday. Concerning the USD, there will be a release of CB Conumer Confidence data at 3pm London time.