AUD/USD: Possible higher support at 0.7250
Yesterday’s signals were not triggered as unfortunately, the bearish reversal at 0.7300 which would have given a short trade entry signal did not complete until after 5 pm Tokyo time.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken between 8 am New York time Tuesday and 5 pm Tokyo time Wednesday.
Long Trade Ideas
- Go long following bullish price action on the H1 time frame immediately upon the next touch of 0.7217 or 0.7187.
- 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 0.7300, 0.7317, or 0.7340.
- 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 the outlook here was broadly less bullish, and over the near term the price was likely to consolidate below 0.7300, so a short trade from a reversal there later could be an interesting trade.
This was an accurate call, as the price reversed firmly at 0.7300 as I had thought might be likely to happen.
As the market has settled into today’s London session, we continue to see the risk-off flow. It is nothing spectacular or very out of the ordinary, but it is boosting the U.S. Dollar at the expense of almost every “risk” currency, and there are not many currencies “riskier” than the Australian Dollar.
This suggests that we are likely to see a continuation of the short-term bearish momentum in this currency pair today. However, we may find some support if and when the big psychological quarter-number at 0.7250 is hit.
If the price can get established below 0.7250, it is likely to fall further.
If 0.7250 holds until the New York open, and we then quickly get 2 consecutive hourly closes below 0.7250, I will take a bearish bias until at least 0.7217.
There is nothing of high importance due today regarding either the USD or the AUD.