AUD/USD: Important bearish breakdown below 0.6450
Yesterday’s signals were not triggered, as the price never quite reached 0.6547, and as there was insufficiently bullish price action at 0.6450.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trade Ideas
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6462 or 0.6547.
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.
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 the price looked evenly balanced between bulls and bears, taking no directional bias, although a short trade from a retracement to 0.6547 looked like the best trade set-up which was likely to happen.
I was wrong to be evenly balanced and should have trusted the trend towards growing market panic and a sharp deterioration in risk sentiment, although I was right to say the best opportunity was likely to be short from 0.6547 – although that level was never quite reached, yesterday’s high price was just 7 or 8 pips below it.
The bearish breakdown below the 0.6450 area is very significant, with the Australian Dollar weaker and weaker on increasingly bearish stock markets. There are no key support levels in sight, and the recent lows were 11-year lows.
I am firmly bearish on this currency pair and short trades from bullish retracements are likely to be good trades today.There is nothing of high importance due today regarding either the AUD or the USD.