AUDUSD: Less bullish on poor Australian GDP data
Yesterday’s signals were not triggered as the bearish reversal at 0.6862 happened before the New York open.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Wednesday to 5pm Tokyo time Thursday.
Short Trade Ideas
- Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6862 or 0.6885.
- 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 0.6814, 0.6803, or 0.6781.
- 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 picture was bullish, but the price was far from support and near resistance, so it may be best to wait for a pullback before looking for a long trade now. I thought that a short trade carefully monitored from a bearish rejection of 0.6885, with risk taken off before the GDP release, would probably be the best opportunity.
This wasn’t a bad call, as the best move was in the short direction, but it was the lower resistance level where we got the bearish bounce, at 0.6862. Note that both this resistance level I identified, and the support level at 0.6814, have both held precisely to the pip.
Although the USD is weak, the poor Australian GDP data has made the AUD relatively weak again, so I take no directional bias here. The best approach will probably be scalping bounces from any support or resistance level listed above which may be reached after the New York open.
Regarding the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time, followed by ISM Non-Manufacturing PMI data at 3pm. Concerning the AUD, there will be releases of Retail Sales and Trade Balance data at 12:30am.