Today’s AUD/USD Signals
Risk 0.75%
Trades may only be taken 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 0.7469, 0.7505, or 0.7524.
- Place the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7423, 0.7367, or 0.7351.
- Place the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 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 Tuesday that it would be very difficult for the price to fall quickly by much from its current level due to the several support levels located below the price. I had thought that the key thing to watch for would be whether 0.7548 held up and I was looking for a long trade from a bounce there.
I was completely wrong; the price fell strongly over the day and has continued to move down strongly, breaking down easily through several levels which I had expected to act as support.
The AUD has been very bearish over recent days, due to fears that the Delta coronavirus variant may be getting established in Australia, and a more dovish tone on monetary policy beginning to come from the RBA.
Technically, the fall is dramatic, and the price is now trading well below the psychological “fair value” level seen by many analysts at 0.7500 and is continuing to break to new 7-month low prices.
This pair often is not predictable by long-term price momentum, but the bearish momentum is so strong here that it seems likely that we will see lower prices in this currency pair over the coming days. If the price breaks below 0.7423, that will be an extremely bearish sign.
Concerning the USD, there will be a release of Unemployment Claims data at 1:30pm London time, followed by Crude Oil Inventories data at 4pm. There is nothing of high importance concerning the AUD scheduled today.