AUDUSD: Dominant bearish trend line broken bullishly
Yesterday’s signals were not triggered, as none of the key levels identified have been reached yet.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
⦁ Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6803, 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 yesterday that the technical picture was still bearish as the medium to long-term descending trend line continued to hold, although we had a bit of a bounce at the first support level at 0.6769. I was ready to be more bearish below 0.6769 and more bullish above 0.6803, but I still preferred short trades from resistance levels here overall.
This was a good call and was enough to at least keep out of trouble, with neither level being reached yet. However, there is a bullish change worth noting: the bearish trend line has been broken passively, by the price refusing to descend below the support level at 0.6769. This creates a more bullish picture, so despite AUD weakness, a better approach might be to look for a long trade at 0.6769 which would be confirmed by a relatively speedy bullish breakout above 0.6803. I would take a bullish bias if 0.6769 gives a bullish bounce first or a bearish bias if 0.6803 gives a bearish bounce first.
Regarding the USD, there will be a release of Chicago PMI data at 2:45pm London time. Concerning the AUD, there will be a release of Private Capital Expenditure data at 12:30am.