Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be taken from 8am New York time Wednesday until 5pm Tokyo time Thursday.
Long Trade Ideas
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7070, 0.7061, 0.7025, or 0.7000.
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 0.7140, 0.7204, 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 this pair was likely to consolidate below the resistance level at 0.7153 until preliminary results or rumours of results or turnout from the U.S. presidential election would begin to come in. I thought that any signs of a Biden victory were likely to push up pro-risk sentiment.
I was wrong – the price actually broke well above the resistance level at 0.7153, before falling strongly as rumours and exit polling suggested the U.S. election result would be too close to call. The price then recovered and continues to recover as the latest results, at the time of writing, suggest that Biden is likely to edge a very narrow victory.
It is very likely that there will be no official election result until the end of this week or even longer, and markets are likely to remain volatile in the meantime, especially if results keep the picture too close to call.
The best trading approach in this situation is likely to be trading reversals from price extremes. Therefore, I will be happy to take a short trade from a bearish reversal at 0.7204 or a higher resistance level, or a long trade from a bullish reversal at 0.7025 or 0.7000.
There is nothing of high importance due today concerning the AUD. Regarding the USD, counting and result releases are underway in the U.S. presidential election, and there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time followed by ISM Services PMI data at 3pm.