AUDUSD: Bullish but beware of 0.6880
Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8am New York time Wednesday to 5pm Tokyo time Thursday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6917 or 0.6940.
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 Ideas
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6855, 0.6845, 0.6834, 0.6809 or 0.6769.
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 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.”
This was enough to stay out of trouble, but I should have shown more faith in the bullish double bottom we saw some days ago at 0.6809 continuing to push the price up.
The price has risen firmly and printed several new higher support levels while doing so, both of which are bullish signs. I take a weakly bullish bias on this pair but note that there are major USD releases due today which are going to be the key determinant of where the price goes over the next day. However, it looks as if there is more upside than downside potential, so a weakening USD could make this pair interesting later.
Bulls should watch out for the recent inflective level at 0.6880 – it makes sense to be more bullish above that price than below it.
Regarding the USD, there will be releases of ADP Non-Farm Employment Change data at 12:15pm London time, followed by Advance GDP at 12:30pm, and the FOMC Statement / Federal Funds Rate at 6pm then the usual press conference half an hour later. Concerning the AUD, there will be a release of Building Approvals data at 12:30am.