Last Thursday’s AUD/USD signals were not triggered, as there was no bearish price action when the resistance levels identified that day were first reached.
Today’s AUD/USD Signals
Risk 0.75%
Trades may only be taken before 5pm Tokyo time Tuesday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7664, 0.7683, or 0.7701.
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 0.7625, 0.7574, 0.7531.
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 Thursday that it looked likely we would short-term consolidation without any bearish momentum but with plenty of room remaining for the price to fall to the very psychologically important round number at 0.7500.
I was ready to take a short trade from a bearish reversal which might set up later at 0.7585 in line with the long-term trend.
I was completely wrong – the price rose firmly throughout the day.
The technical picture now is of a ranging consolidation, as risk-on flows are both benefitting the U.S. and the Australian dollars, so their relative values are not diverging much at present.
The Reserve Bank of Australia released its latest rate statement a few hours ago, but the release contained no surprises and seems to be having very little affect on the price of the Aussie.
The best approach looks likely to be trading reversals at price extremes. Therefore, I will be ready to take a short trade from a bearish reversal at 0.7701, or a long trade from a bullish reversal at 0.7574 although that is not the most extreme support level – however, it would be the final leg of a bullish “over and under / Quasimodo” pattern if it sets up.
There is nothing of high importance due today regarding either the AUD or the USD.