AUDUSD analysis: surprise Australian election result boosts Aussie
Last Thursday’s signals were not triggered as neither of the key levels were reached that day.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Long Trade
Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.6891.
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 0.6936, 0.6963 or 0.6986.
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 last Thursday that I was less bearish on this currency pair because the price seemed reluctant to fall – however, until the bulls can overcome the new lower resistance at 0.6936, it made sense for medium to long-term traders to maintain a bearish bias. This approach worked out well as the price continued its descent over the following day, closing right near its low.
However, the picture has changed after the weekend following the surprise victory of the Australian government in a general election which it was widely expected to lose. The government are seen as stronger for the currency, so this caused the price to gap up, and the push continue until just a whisker below the next resistance level at 0.6936.
There is lots of residual bearishness that will probably not be broken easily, with three levels and a major bearish trend line all below 0.6986, so bears are likely to get more opportunities to look for short trades at these areas.
I would take a bearish bias if the price rejects 0.6936 again and turns to fall more decisively.
There is nothing of high importance due today concerning the USD. Regarding the AUD, there will be a release of the RBA’s Monetary Policy Meeting Minutes at 2:30am.