Last Thursday’s signals were not triggered as the bullish price action took place slightly below the support level identified at 0.7248.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered prior to 8am New York time Monday and 5pm Tokyo time Tuesday.
Long Trade Ideas
Long entry following bullish price action on the H1 time frame immediately upon the next touch of 0.7280, 0.7263, 0.7245, 0.7221, or 0.7204.
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.
Take off 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, 0.7361, 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.
Take off 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 the opportunity here looked most likely to be when the floor at 0.7248 gave way, triggering a likely cascade of short stops, which could push the price all the way down to 0.7200 at least quite quickly.
I was ready to take a bearish bias if we had gotten an hourly close below 0.7248 after the New York open, which was then confirmed by a failed pullback on a shorter time frame.
This was a good call as the floor did break down, but the opportunity on the short was only for approximately 20 pips of profit overall. Still, day trading with this approach last Thursday during the New York session would have been a profitable approach.
The picture now is weakly bullish, although that level at 0.7248 broke down last week, the price is back up and has printed several new higher support levels since Thursday. The bullishness is helped by the fact that the Aussie is reflecting improving risk sentiment in the market, while the U.S. dollar is relatively weak against all other major currencies, more or less.
However, the bullish case is weakened by the fact that the price has struggled to trade much above 0.7300. Also, it is a Monday, which is typically a quiet day, especially when important data is due as it is for the Australian dollar later.
For these reasons, I would only look to take a long trade from a bounce at 0.7245, or a short trade from a bearish reversal at 0.7340.
Concerning the AUD, there will be a release of the RBA’s Monetary Policy Meeting Minutes at 12:30am London time. There is nothing of high importance scheduled today regarding the USD.