AUD/USD: Increasingly likely that the price has put in a long-term bottom
Last Thursday’s signals were not triggered as the support level at 0.6683 was never quite reached that day.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be taken between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trade Ideas
- Go short following bearish price action on the H1 time frame immediately upon the next touch of 0.6662, 0.6683, or 0.6706.
- 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
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.6562.
- 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 last Thursday that I remained basically weakly bullish, but I thought that the resistance level at 0.6635 could be too strong for the price to advance further yet. This was an OK call as the price did continue down for most of the day before advancing to exceed that price later the next day, but not by much.
The Asian session earlier Monday produced a very sharp spike down of about 6% or 7% with the price recovering quickly all the way back to where it started which is unusual – it is not exactly a flash crash, but more an indication of the market’s panic. However, it is likely that we have now seen a long-term low, with Australia to some extent not suffering from the corona virus panic as other country’s currencies are.
I would be very cautious trading this pair right now as it looks as if it will neither fall nor rise by much for some time, or at least over the coming day.
There is nothing of high importance due today regarding either the AUD or the USD.