AUDUSD: Consolidating above 0.6746
Yesterday’s signals may have produced a long trade from the bullish doji candlestick on the hourly chart which rejected the support level at 0.6746. This trade is in profit and it might be wise to take it as there are initial signs the price may be held by resistance at 0.6770.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Ideas
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6768, 0.6791, or 0.6800.
Place 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.
Long Trade Idea
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6747.
Place 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.
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 price looked likely to reach 0.6747 over the day and so again I looked to this level as today’s pivotal point. A long trade could set up here, but I was not very optimistic about its chances for success.
This was a good forecast, as this scenario was reflected exactly in what happened over the past 24 hours.
If I did have that long trade open from 0.6747, I would close it as I am not optimistic the price will be able to overcome the resistance level at 0.6768.
The price of this currency pair really has no direction, it is bearish over the long-term but over the medium and short terms it is acting quite unpredictably and just swinging around. The only feature which stands out is that were a bearish breakdown of 0.6747 to happen, the picture would become much more bearish – it would be a significantly bearish sign.
Concerning the USD, we will get CPI (inflation) data at 1:30pm London time. Regarding the AUD, there will be a release of Wage Price Index data at 2:30am.