AUDUSD: Bullish but 0.7050 the real test
Last Thursday’s signals produced an excellent long trade from the bounce at the support level identified at 0.6969.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8am New York time and 5pm Tokyo time only.
Long Trade Ideas
Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 0.7025, 0.7002, or 0.6983.
Place the stop loss 1 pip below the local swing low.
Adjust 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 ride.
Short Trade Ideas
Short entry following some bearish price action on the H1 time frame immediately upon the next touch of 0.7047 or 0.7088.
Place the stop loss 1 pip above the local swing high.
Adjust 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 ride.
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 the picture had become more bullish, and the price looked likely to retest the 0.7000 area. However, there was a major U.S. data release due, so I took no directional bias that day.
I was correct to be more bullish, as the price has continued to rise more firmly, steadily creating new higher support levels which are holding firm. The solid move holding up the price above the big round number at 0.7000 is another bullish sign. However, there are two signs supporting a more bearish case: the price has not breached the very key 0.7047 resistance level, and the NZD is moving up more strongly than the AUD with which it typically enjoys a high level of positive correlation.
This means that 0.7047 is very likely to be today’s pivotal point. A strong break above 0.7047 would be a bullish sign and I would take a bullish bias if it happens later. However, if the level is rejected following a dovish impact from the RBA’s minutes release due later, it could begin a substantial downwards movement.
Concerning the AUD, there will be a release of the RBA’s Monetary Policy Meeting Minutes at 2:30am London time. There is nothing of high importance due today regarding the USD.