AUD/USD: 0.7250 area still looks pivotal
Last Thursday’s signals produced a slightly profitable long trade from the bullish bounce off the support level identified at 0.7281.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered from 8 am New York time Monday until 5 pm Tokyo time Tuesday.
Long Trade Ideas
- Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7248 or 0.7229.
- 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 0.7310 or 0.7340.
- 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 last Thursday that it was likely that the price would continue to consolidate between 0.7250 and 0.7340 over the rest of the week at least.
This was a good call as it turned out to be correct and could have been used as a profitable basis for range trading.
The range continues to survive as the new week gets underway, but the short-term price action is certainly bearish.
Nevertheless, the support confluent with the key psychological quarter-level at 0.7250 seems to be so well-established that it should be worth taking a long trade there if the price gets down there then prints a bullish reversal.
I am also prepared to take a short trade from a bearish reversal at 0.7340.
I think this range is likely to continue to hold for a while longer yet.
There is nothing of high importance due today concerning the AUD. Regarding the USD, the Chair of the Federal Reserve will be giving a minor speech at 3 pm London time.