Last Thursday’s signals were not triggered, as the bullish price action took place a little way below the support level identified at 0.7248.
Today’s AUD/USD Signals
Risk 0.50%.
Trades may only be taken between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Long Trades
- Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.7299 or 0.7231.
- 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 trade is 20 pips in profit and leave the remainder of the position to run.
Short Trades
- Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.7343 or 0.7382.
- 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 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 if the price failed to rise above 0.7300 as we headed into the New York open, I would be comfortable taking a bearish bias. This was a good call as the price continued to fail there and then fell all the way to 0.7239 before turning bullish.
This currency pair is in a long-term bearish trend, but we are seeing a medium-term consolidative triangle begin to appear and produce a lower trend line which is holding the price up. Within the triangle, we are seeing quite wide swings in the price both up and down. This suggests that it is going to be challenging to take a directional bias, with a better approach likely to be to trade strong rejections of key levels. The support at 0.7299 looks very strong and attractive, the resistance at 0.7343 even more so.
There is nothing important due today concerning either the AUD or the USD.