AUDUSD: Unpredictable action
Last Thursday’s signals produced a nicely profitable move up from the support level identified at 0.6809. Any remaining profit should probably be taken now.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered from 8am New York time Tuesday to 5pm Tokyo time Wednesday.
Short Trade Idea
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6917.
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 Ideas
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6834, 0.6809 or 0.6769.
Put 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.
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 the big picture was that the AUD was relatively bearish and the medium-term bearish topping out was continuing. This meant that a continued movement down to 0.6809 looked likely to happen. This was a great call as it described perfectly what did happen exactly to the pip, with the price making a low at 0.6809 before rising again strongly from there.
This pivotal point at 0.6809 continues to impress and remains the standout price level in the price chart below – I would be prepared to take a bullish bias if another bounce happened down there following a bearish price movement. The other levels nearby look weak and the medium-term price action unpredictable now the bullish move seems to have played out.
Regarding the USD, there will be a release of CB Consumer Confidence data at 2pm London time. Concerning the AUD, there will be a release of CPI (inflation) at 12:30am.