AUDUSD: Strong bearish reversal at 0.7047
Yesterday’s signals correctly identified the bearish reversal at 0.7047 although the price action was not quite correct technically for a trade entry.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 5pm Tokyo time Friday.
Long Trade Ideas
Go long following some bullish price action on the H1 time frame immediately upon the next touch of 0.7002 or 0.6987.
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 Trade Idea
Go short following some bearish price action on the H1 time frame immediately upon the next touch of 0.7047.
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 if the dominant bullish pattern built 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 took a weak and cautious bullish bias for now above 0.7000. This was a good call as the price rose before reversing at my resistance level of 0.7047 almost to the pip. The fell from there has been quite strong. That price is the lower boundary of an area of strong resistance, so I expect it to hold for a while. I think the price is more likely to reach the major round number at 0.7000 before it hits 0.7047 again, and if there is a strong bullish bounce at 0.7000, it would probably be a good long trade. I also think the price will fall again from 0.7047, so with a lot of interest and above-average volatility and probably also volume, this is an interesting currency pair to be focusing on when either nearby key level is reached.
There is nothing of high importance due today regarding the AUD or the USD. It is a public holiday in the U.S.A.