Last Thursday’s AUD/USD signals were not triggered as the bearish reversal at the resistance level identified at 0.7600 did not happen until after the Tokyo close.
Today’s AUD/USD Signals
Risk 0.75%
Trades must be taken by 5pm Tokyo time Wednesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7577, 0.7636, or 0.7649.
- Put 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 Idea
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7542.
- Put 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 the inflective point overhead confluent with the round number at 0.7600 looked likely to be strong resistance.
That level did provide a small bearish reversal, but it was quickly exceeded so this did not turn out to be a great call.
The technical picture is more bearish now, both over the long and short terms, with the price falling from the new resistance level at 0.7577 and threatening the support at 0.7542 which looks pivotal. The price has a long way to fall if it decisively breaks below 0.7542 as there are no key support levels until 0.7423, but the big round number at 0.7500 may act as support before that if it is reached.
The USD is gaining almost everywhere, and the AUD is one of the more bearish currencies, so due to the bearish technical situation and momentum in the USD, I will take a bearish bias if we get two consecutive lower hourly closes below 0.7542. I would be careful to take the risk off the trade once 0.7500 is reached and if this cannot be done, just close it out for profit at that price when it is reached.
There is nothing of high importance due today concerning the AUD or the USD.