AUDUSD: Bullish break above 0.7000 psychological level
Yesterday’s signals may have produced a losing short trade from 0.7000.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Wednesday until 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 0.6987.
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 Idea
Short entry following some bearish price action on the H1 time frame immediately upon the next touch of 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 the buying looked quite solid, but a failure to break above 0.7000 and a bearish reversal there could be an attractive place technically to enter a short trade later. This turned out not to be a good call as although the resistance initially held, it only gave a few pips before the price was able to make a bullish break above 0.7000. Ironically, the interest rate cut yesterday in Australia had the effect of boosting the Australian stock market which in turn has probably seen a capital inflow from abroad which in turn has boosted the AUD. If this pattern builds up some steam, we could see the price rise, with no obvious resistance until 0.7047 or perhaps the inflection point at about 0.7030.
I take a weak and cautious bullish bias for now above 0.7000.
Concerning the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time followed at 3pm by ISM Non-Manufacturing PMI data. Regarding the AUD, there will be a release of Retail Sales data at 2:30am.