AUDUSD: Bearish breakdown from consolidating triangle pattern
Yesterday’s signals produced a short trade from the bearish rejection of the resistance level at 0.6822. This trade is still in play and the short-term outlook is likely to depend upon whether the new resistance level shown in the chart below at 0.6808 holds over the next few hours.
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 0.6808, 0.6822, or 0.6862.
⦁ 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 resistance at 0.6822 continued to look extremely pivotal and I saw the obvious potential here as a bullish movement following a breakout above the 0.6830 area. I was wrong about that, but right about 0.6822 being pivotal, as it instead produced a downwards movement which produced a bearish breakdown of the consolidating triangle.
The price is behaving bearishly, coming back to test the flipped support to resistance level at 0.6808. If this level holds now going into the New York session and the price continues to fall, that would be a bearish sign signalling that the price was likely to continue down to 0.6769. I would be prepared to take a bearish bias on this currency pair today if 0.6808 holds as resistance.
There is nothing of high importance due today concerning the AUD or the USD.