AUDUSD: 10-year low at 0.6745 in sight
Last Thursday’s signals were not triggered, as the bearish price action took place a few pips above the resistance level at 0.6857.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6829 or 0.6868.
Put 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.
Long Trade Idea
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6745.
Put 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 much would now probably depend upon how the price reacted if and when it reached the nearest resistance level at 0.6857 – this was likely to be the day’s pivotal point.
I was a few pips out, with the price making a high that day from 0.6860 and selling off from there, but it was a relatively good call.
The situation now technically is very interesting and significant, with the price close to a 10-year low at 0.6745, which is also confluent with a major psychological level at 0.6750. If the price can get established below 0.6745, it could fall much further very quickly as it will really be trading in “blue sky”. Alternatively, long-term buyers might step in with large volumes there or nearby, pushing the price up to make another very long-term low.
I would take a bearish bias for the day if the price is below 0.6740 at 9am New York time.
Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time. Concerning the AUD, there will be releases of the RBA’s Cash Rate and Rate Statement at 5:30am.