AUDUSD analysis: bottoming out below 0.6870
Yesterday’s signals were not triggered, as none of the key levels were reached within the specified period.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Long Trade
Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.6827.
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 0.6891 or 0.6936.
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 what was really interesting was how the price had fallen again to get to a level close to yesterday’s long-term low price. I thought that the Australian Dollar looked bearish and if the price could trade at 0.6860 or below for a couple of hours consecutively, I was ready to take a bearish bias on this currency pair.
This was a great call at least insofar as I was right in identifying the pivotal level of the day. Last week’s low was never broken, and in the last few hours as the U.S. Dollar starts to give up some of its recent broad gain, so the AUD is rising with short-term momentum. At the time of writing, it looks likely that it will be established above the resistance level at 0.6891 by the time that New York opens – if so, that would be a bullish sign.
There is a bearish long-term trend, but it does not look as though the price is ready to resume its earlier downwards movement today, so standing aside is probably the best approach today.
There is nothing important due today concerning the AUD. Regarding the USD, there will be a release of the FOMC Meeting Minutes at 7pm London time.