Yet the price looks well supported at 0.7450.
Last Thursday’s AUD/USD signals were not triggered, as there was no bullish price action when the support level at 0.7423 was reached that day.
Today’s AUD/USD Signals
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7505, 0.7524, 0.7537, or 0.7548.
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 Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7471 or 0.7448.
- 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.
I wrote last Thursday that this pair had made a dramatic fall, with the price slicing easily through several anticipated support levels and trading well below the psychological “fair value” level seen by many analysts at 0.7500.
I thought that we would see still lower prices to some extent due to the strong bearish momentum. I was correct insofar as the price continued downwards for several hours after my forecast, reaching as low as 0.7409. However, I also thought a break below 0.7423 would be an extremely bearish sign, and it was not, with the price rebounding quite quickly from that zone.
The picture now is one of a weak bullish recovery from last week’s low, with the weak bullish advance halted by resistance near the big round number at 0.7500, but with what looks likely to be strong support at 0.7448 – I am not very confident that the support level I have drawn at 0.7448 will hold.
I will be happy to take either a long trade from a bullish bounce at 0.7448 or a short trade from a bearish reversal at 0.7505. I will prefer the short trade if it sets up.
Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance concerning the AUD scheduled today.