AUD/USD: Beware of bullish reversal from 0.6817
Yesterday’s signals gave a profitable short trade from the bearish reversal at 0.6868. It is probably wise to take some partial profit now as there are signs that a bullish retracement is happening.
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 Idea
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6868 or 0.6889.
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 Idea
Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6817 or 0.6803.
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 I was ready to take a bearish bias if we had gotten two consecutive hourly closes below 0.6850 after New York opened for business OR at a bearish reversal following a retracement which touched 0.6868. This was a great call as we had a reversal at 0.6868 which produced a profitable short trade.
We can readjust the bearish price channel to make it even more perfectly symmetrical. It has pushed the price down. However, we now see some signs of a bullish retracement.
I would still be prepared to take another short trade from a bearish reversal at 0.6868 if that happens before the support level at 0.6817 is hit. The area between 0.6817 and the round number at 0.6800 is likely to produce some kind of bullish movement which could end up invalidating the bearish price channel.
Regarding the AUD, there will be a release of Employment Change and Unemployment Rate data at 12:30am. There is nothing of high importance due today concerning the USD.