AUDUSD: Bearish, but pivotal area below around 0.6800 may be supportive
Yesterday’s signals were not triggered, as there was no bullish price action at 0.6809 when the level was reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade Ideas
⦁ Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6809, 0.6833, 0.6862, or 0.6885.
⦁ 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 0.6769, 0.6754, or 0.6744.
⦁ 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 yesterday that the price was looking bearish over the short term and seemed about to break down below 0.6833 and make a move to 0.6809. This was a good call, as the scenario played out as I forecasted it would.
I also noted that the area around 0.6800 is a medium-term pivotal point down to 0.6769, so we could see a medium-term bullish reversal begin from this area.
The AUD is the weakest major currency after falling following disappointing Australian employment data earlier.
There are reasons to be bearish, but it is important to be cautious of longer-term buyers coming in between 0.6800 and 0.6769. Therefore, I would trade short on shorter time frames below 0.6809, but I would be ready to get out or to even take a long trade if there is a convincing bullish bounce later at 0.6769.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of PPI data at 1:30pm London time, followed by testimony by the Chair of the Federal Reserve before Congress at 3pm.