Yesterday’s signals triggered a short trade entry following the bearish rejection by a bearish engulfing candlestick of the resistance level identified at 0.7382. This is in profit but as a counter-trend trade it should probable be closed out ASAP due to the bullish price action over the past few hours, as at the time of writing.
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 0.7322 or 0.7299.
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 Trade
Go short following some bearish price action on the H1 time frame immediately upon the next touch of 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 yesterday that it made sense to remain bullish above 0.7346 and maybe even lower than that. The resistance level at 0.7382 may be hard to break and was likely to be the day’s pivotal level if 0.7346 held up for a while longer. This was a reasonably good call as the price did continue to advance before turning bearish at the resistance level identified at 0.7382 right to the pip. The support at 0.7346 has been invalidated, but the price action isn’t convincingly bearish. I do not feel confident calling short-term direction here, but a long trade at a bullish bounce at 0.7322 would look attractive. There is a major USD release due later in the New York session which could push the price anywhere.
There is nothing important due today concerning the AUD. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time, followed by the FOMC Meeting Minutes at 7pm.