AUDUSD: Weakly bearish below 0.6862
Yesterday’s signals may have produced a losing long trade from the hourly bullish pin candlestick which rejected the support level at 0.6862.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered from 8am New York time Tuesday to 5pm Tokyo time Wednesday.
Short Trade Idea
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 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 0.6817 or 0.6803.
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 I would take a weakly bullish bias if we had gotten a couple of consecutive hourly closes above 0.6890 after 8am New York time. This was a great call as the price never got beyond that level before moving down, with the decline accelerating on the release of the RBA’s Minutes which had a weakening effect on the AUD. We initially saw some support at the level at 0.6862 which has been pivotal for some time, but once that broke down the price continued to fall. We have not only a weaker AUD, but the USD has also been regaining ground this week. Therefore, it looks likely that we will see still lower prices today, but it is unclear by how much and how quickly it will happen.
The best that can be said is that the level at 0.6862 has probably flipped to become resistant, so a short trade from there could work well today. Later, if the price reaches either of the support levels below, these are also likely to provide good long trading opportunities, as we have no real long or medium-term trend in this currency pair.
There is nothing of high importance due today regarding the AUD or the USD.