AUDUSD: Bearish on RBA rate cut rumours
Yesterday’s signals were not triggered, as the bearish price action took place a few pips below the support level identified at 0.6930.
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 Ideas
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6882 or 0.6809.
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 0.6861 or 0.6817.
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 thought it was too early to look for a long trade, but I also saw the key level at 0.6930 as an important pivotal point and if it broke down, that it would be a bearish sign.
I was wrong about not going short as the price has fallen strongly and there was initially some support around 0.6930 but it broke down, so this was a partially accurate call.
The AUD is moving strongly, falling quite heavily, and this is due mainly to rumours that the RBA will move to cut rates further. The bushfires crisis is not helping, and as the AUD is a “risky” currency, tensions in the Middle East are also helping to push the price down.
We have seen the most of this bearish movement already, but it would be wise I think to look only for short trades. I would take a bearish bias if we get a pullback to 0.6909 and a bearish reversal there, or even at 0.6882.
Concerning the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time. Regarding the AUD, there will be a release of Building Approvals data at 12:30am.