AUD/USD: Lots of room to fall further
Yesterday’s signals were not triggered, as there was no bullish price action when 0.6748 was reached.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade Ideas
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6740 or 0.6781.
- 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 Idea
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6677.
- 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 bearish bias on this currency pair if the price got below 0.6737 on at least average relative volatility. The Australian Dollar should continue to be weak as long as fear remains over the coronavirus outbreak in China.
This was a good call as the price has now broken below 0.6737 and is continuing to fall and it shows every sign of continuing to move down as the market gets a bit more firmly into risk-off mode on fear of the coronavirus.
The AUD is especially sensitive to problems related to China due to its heavy reliance on the Chinese economy, so the AUD is getting hard hit by this outbreak and technically, has plenty of room to fall before hitting support.
I take a firmly bearish bias on the AUD and on this pair below 0.6739. Traders may find it even more profitable to short the AUD/JPY currency cross.
There is nothing of high importance due today regarding the AUD. Concerning the USD, there will be a release of Advance GDP data at 1:30pm London time.