AUD/USD: Aussie hit hard
Yesterday’s signals gave a nicely profitable short trade from the bearish rejection of the resistance level at 0.7229. A great exit point was provided by the bullish turn we seem to be getting from the support level identified at 0.7121.
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 0.7121 or 0.7035.
- 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 0.7182, 0.7229, or 0.7248.
- 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 despite the recent bullish bounce, the edge should remain with bears as long as the price remained below 0.7248. A short trade from a bearish reversal at that level looked attractive.
This was a good call as to keeping a bearish bias, although the price never made it back to 0.7248, but instead fell fairly strongly from the resistance level at 0.7229 before seeing to find some support at 0.7121.
The price has a long way to fall below 0.7121 as there are no key support levels until 0.7034 just above the very big round number at 0.7000.
The Australian Dollar is probably the weakest major currency at present, and the USD has been strong, so I would be prepared to take a bearish bias today if we get two consecutive closes below 0.7121 (0.7100 would be even better) after New York opens, and hope to ride that down to 0.7050 – the half number a few pips above the support at 0.7034, for some safety.
There is nothing of high importance scheduled today regarding the AUD. Concerning the USD, there will be a release of Flash Manufacturing & Services PMI at 2:45 pm London time, followed 15 minutes later by testimony from the Chair of the Federal Reserve before Congress.