AUD/USD: Back below the big round number of 0.6500
Last Thursday’s signals produced a long trade following the bullish pin candlestick on the hourly chart which rejected the support level identified at 0.6506. This gave a maximum of about 40 pips of profit on the long side.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Ideas
Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.6436 or 0.6473.
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
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6327.
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 there were several bullish signs so I would look only for long trades here unless we got unemployment claims data later which was far worse than the market consensus. The data was worse than expected but not dramatically so. This was not a good call as the price moved down and has been falling ever since due to the worsening of risk sentiment, which has seen riskier assets such as the Australian Dollar weaken and safe havens such as the U.S. Dollar strengthen.
Although the price has clearly sold off, the technical picture looks relatively evenly balanced between bulls and bears. I think we will see the price consolidate today between 0.6436 and 0.6370, so a short trade from a bearish rejection of 0.6436 later could be a good short trade opportunity.
Another reason why the price is likely to consolidate is that we have the RBA’s month policy release later in the Asian session, which is likely to produce some directional movement, but the price will probably go sideways before the release.
Regarding the AUD, there will be a release of the RBA’s Cash Rate Statement at 5:30am London time. There is nothing of high importance due today concerning the USD.