AUDUSD: Big test ahead at 0.7000
Yesterday’s signals were not triggered, as the bullish price action at 0.7000 was not strong enough.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Long Trade Ideas
Long entry following some bullish price action on the H1 time frame immediately upon the next touch of 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 0.7025 or 0.7047.
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 yesterday that if the level at 0.7047 was not exceeded soon, we were very likely to see a deeper downwards movement, and possibly even a major medium-term bearish reversal. I saw the day’s pivotal point as likely to be 0.7025. This was a good call as the scenario I expected played out.
The question now for this currency pair is what will happen at 0.7000, which is a major round number and psychological level.
I think if the price can get established below 0.7000, it is likely to fall further over the next few days. To some extent this will depend upon the Australian employment data due later.
I take a weak bearish bias below 0.7000.
There is nothing of high importance due today regarding the USD. Concerning the AUD, there will be a release of Employment Change and Unemployment data at 2:30pm London time.