AUDUSD: Bears back in control
Yesterday’s signals were not triggered, as there was no bullish price action when the support level at 0.6769 was hit.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered from 8am to 5pm Tokyo time Friday.
Short Trade Ideas
⦁ Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6771, 0.6803 or 0.6822.
⦁ 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 0.6754 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 as the bearish trend line had been broken passively, this created 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.
This was enough to keep out of trouble as there was no bullish bounce when 0.6769 was reached, but in fact, my increased bullishness was misplaced. Bears are very much back in control, the Australian Dollar is one of the weakest major currencies right now, and the descending trend line can be re-validated with a slight adjustment. It is shown in its new position in the price chart below.
We have flipped support to resistance at 0.6771, and short-term bearish momentum as the price looks set to hit new medium-term low prices.
The only issue bears have to watch out for is that the next support level at 0.6754 is very confluent with the big quarter-number at 0.6750, so it could see some long-term buyers enter the market if it is hit, possibly pushing the price up.
I would take a bearish bias here today at any bearish reversal following a retracement to a key resistance level.
There is nothing of high importance due today concerning the AUD or the USD. It is a public holiday today in the U.S.A.