AUD/USD: Very pivotal point at 0.6677
Last Thursday’s signals were not triggered, as none of the key levels were reached yet.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Ideas
Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6706, 0.6724, 0.6740, or 0.6781.
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 0.6677.
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 last Thursday that due to the strong negative impact of the Chinese coronavirus on the Australian economy, I took a firmly bearish bias on the AUD and on this pair below 0.6739. I thought that traders may find it even more profitable to short the AUD/JPY currency cross.
These were both good calls, as the price is now 40 pips lower and the AUD fell even more strongly against the JPY.
This pair is now at a very important crossroads: it is getting close to 10-year low prices, which is very significant, and the support level at 0.6677 is extremely pivotal now. The price won’t touch it and is consolidating just above it but has still not yet managed to break up above any key resistance level. Later, the RBA will be giving its monthly policy input, and this will probably be the catalyst either for a strong break below 0.6677 or a major, long-term bullish reversal.
Traders are well-advised to watch how the pair behaves at or near 0.6677 closely after the RBA release.
Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time. Regarding the AUD, the RBA will release its Rate Statement and Cash Rate at 3:30am.