AUDUSD: Very bullish but round number ahead at 0.7000
Last Thursday’s signals were not triggered, as there was no bearish price action when the resistance level at 0.6940 was reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.7008, 0.7035, or 0.7053.
Place 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.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6975, 0.6965, 0.6955, or 0.6940.
Place 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.
Take off 50% of the position as profit when the trade is 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 Thursday that there could be a good opportunity to go short at a reversal at 0.6940. However, I also thought that if the price could instead get established above 0.6940, that would be a bullish sign, but there remained a lot of resistance all the way up to and including the huge psychological level and round number at 0.7000.
The price broke up above 0.6940 so I had correctly identified this as a pivotal point as the price has continued to advance ever since and is now just a few pips below the big round number at 0.7000. I was overly cautious of potential resistance below 0.7000.
The AUD and its highly positively correlated sister currency the NZD are very strong now, as the USD weakens and risk-on sentiment improves, to send these commodity currencies bullishly higher.
However, we do have this resistance area which begins just above 0.7000 and it seems natural to expect some kind of pause or a bearish retracement here.
I would take a bullish bias if we get a solid bullish bounce at any of the support levels identified above.There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of Chicago PMI data at 2:45pm London time.