Yesterday’s signals were not triggered, as there was insufficiently bearish price action when 0.7105 was reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Long Trades
Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.7105 or 0.7088.
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.
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.
Short Trades
Short entry following some bearish price action on the H1 time frame immediately upon the next touch of 0.7144 or 0.7164.
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.
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 yesterday that this pair again looked very hard to trade, but a long from either of the support levels near 0.7000 could be a good long-term trade so I was prepared to take a bullish bias if there were a healthy bounce at either of those lines, despite the bearish triangle break the initial movement would indicate.
This was a good call insofar as the break of the lower triangle trend line was false, and the price came roaring back to now test the upper descending trend line which is shown within the price chart below. Australian Retail Sales data came in much stronger than anticipated, which helped boost the price. So, I was right about expecting a bullish move up from the lows. The technical significance of this movement is an invalidation of the consolidating triangle which can be replaced by a symmetrical descending price channel. A further, solid move up above the highs here would invalidate that too and produce a still more bearish picture.
The situation remains ambiguous and difficult. If the price stalls here for several hours and is held down by this upper trend line, it could produce a good reward to risk short trade set-up, but I remain nervous about trading here for the time being.
There is nothing of high importance due today concerning either the AUD or the USD.