AUD/USD: Price likely to react strongly to FOMC release later
Yesterday’s signals produced a short trade from the bearish reversal by the hourly outside candlestick at 0.7340, but this only gave about 20 pips or profit before it reversed so it was a break-even trade.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered from 8 am New York time Wednesday to 5 pm Tokyo time Thursday.
Long Trade Ideas
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7310, 0.7294, or 0.7248.
- Put the stop loss 1 pip below the lowest recent price.
- Move 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 run.
Short Trade Ideas
- Short entry following bearish price action on the H1 time frame immediately upon the next touch of 0.7340, 0.7363, 0.7379, or 0.7395.
- Put the stop loss 1 pip above the highest recent price.
- Move 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 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 we had a number of quite closely packed resistance levels between 0.7340 and 0.7395, which looked likely to make any further significant upwards movement difficult.
I thought the price was likely to end the day higher.
This was a good and accurate call as the price has risen, but slowly.
Risk sentiment has continued to strengthen a little bit while the U.S. Dollar has continued to mostly weaken, and this has produced a slow rise here.
Later today we are going to get a very important FOMC release which is likely to have a big impact upon the price of this pair, not only affecting the U.S. Dollar but also global risk sentiment which will affect the Aussie. After that, we will see Australian employment data. So, it will probably be a big late New York / Asian session for this currency pair today.
Technically the pair is in a long-term bullish trend and so are shorter time frames.
The rise is currently being suppressed by quite strong resistance at 0.7340 and this may be a major pivotal point if it holds until the FOMC release. If the FOMC release causes price movement above that level for an hour, I would be ready to take a bullish bias. If the price breaks above 0.7340 and holds above it until the release, that would also be a bullish sign.
Regarding the USD, there will be a release of Core Retail Sales data at 1:30 pm London time. The Federal Reserve will be releasing their Economic Projections, Statement, and Federal Funds Rate at 7 pm followed half an hour later by the usual press conference. Concerning the AUD, there will be releases of Unemployment Rate and Employment Change data at 2:30 am.