AUDUSD: Dominant bearish trend line
Last Thursday’s signals were not triggered, as the bearish price action took place a little way above the resistance level identified at 0.6808.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken 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 0.6803, 0.6822, or 0.6862.
⦁ 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 0.6769, 0.6754, or 0.6744.
⦁ 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 last Thursday that if the resistance level at 0.6808 held going into the New York session and the price continued to fall, that would be a bearish sign signalling that the price was likely to continue down to 0.6769. I was correct to look to the bearish side but unfortunately the level did not hold cleanly. In any case, the move down from this area which we have seen is not very strong.
The picture is more clearly bearish now as we have a clear bearish trend line shown in the price chart below which has held the highs for a few weeks now. The price is currently moving down from there with a short-term bearish trend, although we see buying at about 0.6780. I think the price is likely to continue to fall now though and reach the support level at 0.6769. Be very careful about taking any long trade due to the bearish trend. If I had to pick the best level for a bullish reversal, it would be 0.6754 as this is confluent with the major quarter-number at 0.6750.
There is nothing of high importance due today concerning either the AUD or the USD.