My previous signal on 13th June produced a profitable short trade from the bearish reversal off the resistance level which I had identified at $0.6671.
Today’s AUD/USD Signals
- Risk 0.75%
- Trades must be taken prior to 5pm Tokyo time Thursday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6737 or $0.6775.
- 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 $0.6631, $0.6607, or $0.6584.
- 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 in my previous forecast on 13th June that the AUD/USD currency pair was a continuing consolidation, with a high at about $0.6700 and a low at about $0.6575. This was a good call for the day, as this range held, and we got a profitable short trade from resistance near the top of this range.
The technical picture is quite different now, driven by a fundamental factor announced just a few hours ago: a stronger than expected increase in Australian CPI (inflation), which stood at an annualized rate of 3.6% last month. It was expected to rise to 3.8% but in fact rose to 4.0%, which is a hawkish surprise and makes a rate cut from the Reserve Bank of Australia less likely. This has pushed the Aussie sharply higher, and at the time of writing, I see continuing bullish momentum driven by this data release.
The price chart below does show some signs that the bullish momentum might be topping, however. One thing to watch out for which is quite plain within the price chart below is the bearish inflection which took place the last time the price touched the round number at $0.6700 on 12th June.
I think that the opportunity for a good trade in this pair has already passed, and that we need to wait now and see what happens to the US Dollar over the coming days. However, if the US Dollar looks like it will regain bullish momentum, a bounce at the support level at $0.6631 later this week could be a great trade.
There is nothing of high importance due today regarding either the AUD or the USD.
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