AUD/USD: New 1-year highs hit again
Last Thursday’s signals produced a nicely profitable long trade from the bullish bounce off the support level at 0.7217 which I had identified. It may be worth holding onto part of this trade if you still have it open as the action is still bullish and the price has already hit a fresh 1-year high since this week’s open.
Today’s AUD/USD Signals
Risk 0.75%.
Trades must be entered from 8 am New York time Monday to 5 pm Tokyo time Tuesday.
Long Trade Ideas
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.7292.
- 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 short following bearish price action on the H1 time frame immediately upon the next touch of 0.7391 or 0.7419.
- 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 last Thursday that I was prepared to use 0.7255 as a pivotal point today and either take a bullish bias if we got two consecutive hourly closes after the New York open above that level or a bearish bias if the level held until that time then produced a bearish price action rejection.
This was a good call as the level was pivotal and after initially appearing to hold as resistance, we did get the two-hourly closes above that level later in the New York session that day which has now produced a total of 125 pips profit.
The price has gone on to make new highs and although the market is a little quiet today as is typical on a Monday, we are seeing risk assets such as stocks and the Australian Dollar strongly bullish against the U.S. Dollar, although, at present, we are seeing a bearish retracement.
I am prepared to take a long trade from a bounce at the nearest support level of 0.7292 if the price gets there later. I would normally take a bullish bias if get new 1-year high prices also, but that high is very close to a couple of resistance levels so I will not.
Regarding the AUD, there will be a release of the RBA’s Cash Rate and Rate Statement at 5:30 am London time. There is nothing of high importance due to the USD.