AUD/USD: 0.6841 remains pivotal
Yesterday’s signals produced a profitable long trade from the bullish bounce at the support level identified at 0.6841. It would probably be wise to exit this trade for profit as soon as possible.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Thursday and 5pm Tokyo time Friday.
Long Trade Ideas
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.6841 or 0.6774.
- Place the stop loss 1 pip below the lowest recent price.
- Adjust 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 ride.
Short Trade Ideas
- Go long following bearish price action on the H1 time frame immediately upon the next touch of 0.6920.
- Place the stop loss 1 pip above the highest recent price.
- Adjust 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 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 lower prices were most likely. However, there was a strong and supportive level below at 0.6841 which looked very pivotal.
I was not eager to take a long trade from a bounce at 0.6841.
This was a great call as the price fell to 0.6841 before bouncing but the bullish move from there seems to have run out of steam below the upper descending trend line of the bearish price channel, which is shown in the chart below. So, the moves played out exactly as I anticipated in both directions.
The picture remains bearish as long as the price channel holds. We have new resistance at 0.6920 which is confluent with the upper trend line, so this looks like an excellent spot for a short trade if it is tested again.
I will take a short bias if we get a bearish reversal at 0.6920 later, or if we get two consecutive hourly closes below 0.6841 as that would probably be a significant breakdown if it happens.
There is nothing of high importance scheduled today regarding either the AUD or the USD.