Last Tuesday’s AUD/USD signals produced a long trade from the bullish bounce at the support level identified at 0.7716, but it barely broke even as it only produced about 20 pips of profit.
Today’s AUD/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm Tokyo time Friday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7776 or 0.7851.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7713, 0.7697, or 0.7662.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 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 last Tuesday that the technical picture had become considerably more bullish as the U.S. dollar had begun to weaken everywhere, with the Aussie advancing more strongly against the greenback over recent hours than any other currency. I expected that the price may now take some time to consolidate in the absence of any major scheduled news releases. However, if it continued to rise and got established above the major quarter-number at 0.7750, that would suggest a further rise over the near term to 0.7776 at least.
This was a good and accurate call – the price continued to rise over the short term but failed at 0.7750 and has continued to fail there ever since.
Support levels are continuing to hold, and the momentum is weak but still in the bullish direction. These factors suggest that bulls still have an edge, but if 0.7750 continues to hold there will be a bearish reversal soon. It is hard to see any scheduled items which might cause this reversal, so it could happen naturally when New York opens today. A bearish reversal off 0.7750 at about the time New York opens is probably going to be the best trade set-up which could happen today. Until that happens, long trades from a bullish bounce at the support a few pips above 0.7700 are likely to be useful if traded on short time frames.
Concerning the USD, there will be a release of Unemployment Claims at 1:30pm London time. There is nothing of high importance due today regarding the AUD.